SMP
Standard Motor Products, Inc.
$37.90
Stable Earnings Power
80%
P/Adj-EPS × Normalized Multiple
Mild
·
Conviction
Fair Value
Trading 13.6% below fair value
You pay
$37.90
Bear
$38.37
Fair
$43.85
Bull
$49.33
Bear
$38.37
+1.2%
$2.53 × 15x P/E
Fair
$43.85
+15.7%
$2.53 × 17x P/E
Bull
$49.33
+30.2%
$2.53 × 20x P/E
Key Value Driver
Normalized P/E multiple (17x base case)
Implied Market Multiple
15.0x
Summary
Applying a 17x P/E to adjusted EPS of $2.53, the base-case value is $43.85 per share. DDM cross-check: $35.49.
Warnings
The company's reported profits differ from official accounting profits by 37%. Check what costs are being left out of the adjusted number.
Key Risks
- Growth DCF inappropriate — terminal value assumptions dominate
- EV/EBITDA misleading for regulated businesses where capex is mandated
- Regulatory risk is a fat tail not visible in normal multiples