THO
Thor Industries, Inc.
$70.10
Cyclical & Capital-Intensive
80%
Normalized Earnings × Cycle Multiple
Strong
·
Conviction
Overvalued
Trading 95.4% above fair value
You pay
$70.10
Bear
$26.09
Fair
$35.87
Bull
$45.65
Bear
$26.09
-62.8%
$6.52 × 4x
Fair
$35.87
-48.8%
$6.52 × 6x
Bull
$45.65
-34.9%
$6.52 × 7x
Adjust Assumptions
5.5x
6.52$
Key Value Driver
Through-cycle normalized EPS ($6.52)
Implied Market Multiple
10.7x
Analyst Consensus (External Reference)
Never blended into the bear/base/bull estimates above.
Average Target (41 analysts)
$88.00
Divergence from AlphaVal
59%
Summary
Using 7-year normalized EPS of $6.52 at a 6x cycle multiple, the base-case value is $35.87 per share. P/TBV cross-check: 2.2x.
Warnings
Price-to-book value of 2.2x 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 $88.00 (from 41 analysts). Our estimate is 59% 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