THO
Thor Industries, Inc.
$75.32
Cyclical & Capital-Intensive
80%
Normalized Earnings × Cycle Multiple
Strong
·
Conviction
Overvalued
Trading 51.1% above fair value
You pay
$75.32
Bear
$33.48
Fair
$49.83
Bull
$66.20
Bear
$33.48
-55.5%
$6.95 × 4x + net cash
Fair
$49.83
-33.8%
$6.95 × 6x + net cash
Bull
$66.20
-12.1%
$6.95 × 7x + net cash
Key Value Driver
Through-cycle normalized EPS ($6.95)
Implied Market Multiple
10.8x
Summary
Our base-case estimate uses Normalized Earnings × Cycle Multiple. We then blend that result with the average analyst price target of $92.00 from 41 analysts, using a 30% weight on analyst consensus. That produces an estimated intrinsic value of $49.83 per share.
Warnings
Price-to-book value of 2.3x 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 $92.00 (from 41 analysts). Our estimate is 65% 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