RAL
Ralliant Corp.
$61.55
Cyclical & Capital-Intensive
70%
Normalized Earnings × Cycle Multiple
Mild
·
Conviction
Fair Value
Trading 2.5% below fair value
You pay
$61.55
Bear
$50.34
Fair
$63.13
Bull
$75.92
Bear
$50.34
-18.2%
$3.29 × 18x + net cash
Fair
$63.13
+2.6%
$3.29 × 22x + net cash
Bull
$75.92
+23.3%
$3.29 × 26x + net cash
Key Value Driver
Through-cycle normalized EPS ($3.29)
Implied Market Multiple
18.7x
Summary
Our base-case estimate uses Normalized Earnings × Cycle Multiple. We then blend that result with the average analyst price target of $55.83 from 7 analysts, using a 20% weight on analyst consensus. That produces an estimated intrinsic value of $63.13 per share.
Key Risks
- Standard 10-year DCF produces unreliable terminal values for cyclicals
- 'Cheap' P/E at cycle peak is the most common value trap — normalize first
- Captive finance subsidiaries have different risk profiles from manufacturing