THO
Thor Industries, Inc.
$77.01
Cyclical & Capital-Intensive
80%
Normalized Earnings × Cycle Multiple
Moderate
·
Conviction
Overvalued
Trading 36.2% above fair value
You pay
$77.01
Bear
$38.02
Fair
$56.56
Bull
$75.07
Bear
$38.02
-50.6%
$6.95 × 4x + net cash
Fair
$56.56
-26.6%
$6.95 × 6x + net cash
Bull
$75.07
-2.5%
$6.95 × 7x + net cash
Key Value Driver
Through-cycle normalized EPS ($6.95)
Implied Market Multiple
11.1x
Summary
Our base-case estimate uses Normalized Earnings × Cycle Multiple. We then blend that result with the average analyst price target of $114.25 from 41 analysts, using a 30% weight on analyst consensus. That produces an estimated intrinsic value of $56.56 per share.
Warnings
Price-to-book value of 2.4x 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 $114.25 (from 41 analysts). Our estimate is 72% 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