RE:RE:Linamar - $10/share EPS in 2024? I keep telling myself that in the long run, the market is a weighing machine, not a voting machine!
I am expecting $10 EPS in 2024 but I suspect what holds the market back is what the "owner earnings" or Free Cash Flow is in Linamar.
As they continue to invest outside of the high capex mobility segment the FCF profile of the business improves. At some point FCF guidance as a % of revenue comes down and FCF relative to the market capitalization gives investors a more comfortable view on supporting a higher multiple.
I think 2024 is a pivotal year for Linamar to prove that the gap between EPS and "Owner Earnings" is shrinking and that the free cash flow being generated will be re-invested in parts of the business with a more durable cash flow stream. This is certainly why I am here!
Looking forward to a great 2024!
LR