WERN
Werner Enterprises, Inc.
$32.89
Cyclical & Capital-Intensive
80%
Normalized Earnings × Cycle Multiple
Strong
·
Conviction
Overvalued
Trading 175.1% above fair value
You pay
$32.89
Bear
$8.70
Fair
$11.96
Bull
$15.22
Bear
$8.70
-73.6%
$2.17 × 4x
Fair
$11.96
-63.6%
$2.17 × 6x
Bull
$15.22
-53.7%
$2.17 × 7x
Adjust Assumptions
5.5x
2.17$
Key Value Driver
Through-cycle normalized EPS ($2.17)
Implied Market Multiple
15.1x
Analyst Consensus (External Reference)
Never blended into the bear/base/bull estimates above.
Average Target (36 analysts)
$43.56
Divergence from AlphaVal
73%
Summary
Using 7-year normalized EPS of $2.17 at a 6x cycle multiple, the base-case value is $11.96 per share. P/TBV cross-check: 1.7x.
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 $43.56 (from 36 analysts). Our estimate is 73% 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