TRN
Trinity Industries, Inc.
$35.69
Stable Earnings Power
40%
P/Adj-EPS × Normalized Multiple
Moderate
·
Conviction
Fair Value
Trading 17.1% below fair value
You pay
$35.69
Bear
$34.45
Fair
$43.06
Bull
$51.67
Bear
$34.45
-3.5%
$3.05 × 12x P/E
Fair
$43.06
+20.7%
$3.05 × 15x P/E
Bull
$51.67
+44.8%
$3.05 × 18x P/E
Key Value Driver
Normalized P/E multiple (15x base case)
Implied Market Multiple
11.7x
Summary
Our base-case estimate uses a valuation based on adjusted earnings per share and a normalized price-to-earnings multiple. We then blend that result with the average analyst price target of $35.00 from 25 analysts, using a 25% weight on analyst consensus. That produces an estimated intrinsic value of $43.06 per share.
Warnings
Dividend-based valuation: $84.30 (above our primary estimate by 84%). Large gaps may signal the dividend doesn't reflect full earning power.
Wall Street's average price target is $35.00 (from 25 analysts). Our estimate is 31% above the consensus -- consider that gap carefully.
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