TWI
Titan International, Inc.
$7.35
Cyclical & Capital-Intensive
80%
Normalized Earnings × Cycle Multiple
Strong
·
Conviction
Undervalued
Trading 69.3% below fair value
You pay
$7.35
Bear
$19.38
Fair
$23.94
Bull
$28.50
Bear
$19.38
+163.6%
$1.27 × 20x + net cash
Fair
$23.94
+225.7%
$1.27 × 24x + net cash
Bull
$28.50
+287.7%
$1.27 × 28x + net cash
Key Value Driver
Through-cycle normalized EPS ($1.27)
Implied Market Multiple
5.8x
Summary
Our base-case estimate uses Normalized Earnings × Cycle Multiple. We then blend that result with the average analyst price target of $13.00 from 9 analysts, using a 20% weight on analyst consensus. That produces an estimated intrinsic value of $23.94 per share.
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.
Wall Street's average price target is $13.00 (from 9 analysts). Our estimate is 105% above 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