TRN
Trinity Industries, Inc.
$25.22
Stable Earnings Power
40%
P/Adj-EPS × Normalized Multiple
Strong
·
Conviction
Undervalued
Trading 44.9% below fair value
You pay
$25.22
Bear
$36.60
Fair
$45.75
Bull
$54.90
Bear
$36.60
+45.1%
$3.05 × 12x P/E
Fair
$45.75
+81.4%
$3.05 × 15x P/E
Bull
$54.90
+117.7%
$3.05 × 18x P/E
Adjust Assumptions
15.0x
3.05$
Key Value Driver
Normalized P/E multiple (15x base case)
Implied Market Multiple
8.3x
Analyst Consensus (External Reference)
Never blended into the bear/base/bull estimates above.
Average Target (25 analysts)
$36.00
Divergence from AlphaVal
27%
Summary
Applying a 15x P/E to adjusted EPS of $3.05, the base-case value is $45.75 per share. DDM cross-check: $71.21.
Warnings
Dividend-based valuation: $71.21 (above our primary estimate by 56%). Large gaps may signal the dividend doesn't reflect full earning power.
Wall Street's average price target is $36.00 (from 25 analysts). Our estimate is 27% 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