SPXC
SPX Technologies, Inc.
$212.86
Cyclical & Capital-Intensive
80%
Normalized Earnings × Cycle Multiple
Strong
·
Conviction
Overvalued
Trading 87.1% above fair value
You pay
$212.86
Bear
$87.56
Fair
$113.78
Bull
$139.99
Bear
$87.56
-58.9%
$4.29 × 14x + net cash
Fair
$113.78
-46.5%
$4.29 × 18x + net cash
Bull
$139.99
-34.2%
$4.29 × 22x + net cash
Key Value Driver
Through-cycle normalized EPS ($4.29)
Implied Market Multiple
49.6x
Summary
Our base-case estimate uses Normalized Earnings × Cycle Multiple. We then blend that result with the average analyst price target of $271.00 from 12 analysts, using a 20% weight on analyst consensus. That produces an estimated intrinsic value of $113.78 per share.
Warnings
Price-to-book value of 32.7x is above the normal range for this type of business (0.7x-2.0x). The stock may already price in a strong cycle.
Wall Street's average price target is $271.00 (from 12 analysts). Our estimate is 73% below the consensus -- consider that gap carefully.
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