TRS
TriMas Corporation
$38.75
Cyclical & Capital-Intensive
80%
Normalized Earnings × Cycle Multiple
Strong
·
Conviction
Overvalued
Trading 208.5% above fair value
You pay
$38.75
Bear
$9.25
Fair
$12.56
Bull
$15.86
Bear
$9.25
-76.1%
$1.32 × 7x
Fair
$12.56
-67.6%
$1.32 × 10x
Bull
$15.86
-59.1%
$1.32 × 12x
Adjust Assumptions
9.5x
1.32$
Key Value Driver
Through-cycle normalized EPS ($1.32)
Implied Market Multiple
29.3x
Analyst Consensus (External Reference)
Never blended into the bear/base/bull estimates above.
Average Target (14 analysts)
$38.00
Divergence from AlphaVal
67%
Summary
Using 7-year normalized EPS of $1.32 at a 10x cycle multiple, the base-case value is $12.56 per share. P/TBV cross-check: 4.2x.
Warnings
This company has a built-in lending arm whose debt is mixed in with the main business. We capped the debt adjustment to avoid overstating what the core business owes.
Recent profits ($2.95/share) are 123% above the mid-cycle average ($1.32). Buying based on peak profits is the most common mistake with boom-and-bust businesses.
Price-to-book value of 4.2x 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 $38.00 (from 14 analysts). Our estimate is 67% 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