IEP
IEP
Hold 2026-03-13
Model
DDM
Price at Report
$7.59
Base IV
$11.77
Bear IV
$2.34
Bull IV
$15.78
Entry Zone: 2-11 · Sell Above: 13
Bore Family Office
Valuation Report — Icahn Enterprises L.P. (IEP) • March 13, 2026
3-Stage DDM (Ke) • Discount Rate: 17.50% • Current Price: $7.59
Prepared by Lurch • Bore Family Office • Data: Finnhub, StockAnalysis.com, S&P Global Market Intelligence
🏢 Business Overview
Icahn Enterprises L.P. (IEP) is a diversified holding company controlled by activist investor Carl Icahn (≈85% ownership), operating through subsidiaries in Investment, Energy (CVR Energy), Automotive (IEH Auto Parts), Food Packaging (Viskase), Pharma, and Real Estate segments. The partnership distributes quarterly cash to unitholders and historically funded distributions via asset sales and capital recycling.
IEP has been under severe financial pressure since a May 2023 Hindenburg Research short report alleged significant overvaluation of NAV. The distribution has been cut from $8/unit/year (2022) to $2/unit/year (current), and net asset value has declined substantially. Units outstanding have grown from 260M (2021) to 562M (2025) through continuous issuance. Carl Icahn's personal pledge of IEP units as loan collateral remains an unresolved governance and tail-risk concern.
| Business Segment | Revenue | % of Total | YoY Growth | Margin | Notes |
|---|---|---|---|---|---|
| Investment | $288M | 3% | -40.0% | — | Activist investment fund; negative returns recently |
| Energy (CVR) | $7,200M | 75% | -5.0% | — | CVR Energy refining; CVR Partners fertilizer |
| Automotive | $800M | 8% | -10.0% | — | IEH Auto Parts supply chain |
| Food Packaging | $500M | 5% | +2.0% | — | Viskase sausage casings |
| Pharma & Other | $870M | 9% | -15.0% | — | Generic pharmaceuticals + real estate |
📊 Financial Snapshot
| Metric | 2021 | 2022 | 2023 | 2024 | 2025 |
|---|---|---|---|---|---|
| Revenue ($M) | $11,338 | $14,196 | $10,934 | $10,020 | $9,658 |
| EBITDA ($M) | $605 | $1,181 | $237 | $523 | $797 |
| Operating Income ($M) | $288 | $672 | $-281 | $12 | $194 |
| Net Income ($M) | $-518 | $-183 | $-684 | $-445 | $-299 |
| EPS (diluted) | $-2.32 | $-0.57 | $-1.75 | $-0.94 | $-0.52 |
| Free Cash Flow ($M) | $11 | $634 | $3,376 | $499 | $-851 |
| Annual DPS | $8.000 | $8.000 | $6.000 | $3.500 | $2.000 |
| Total Debt ($M) | $7,692 | $7,096 | $7,207 | $6,809 | $6,616 |
| Rev YoY Growth | — | +25.2% | -23.0% | -8.4% | -3.6% |
| EBITDA Margin | 5.3% | 8.3% | 2.2% | 5.2% | 8.3% |
| Operating Margin | 2.5% | 4.7% | -2.6% | 0.1% | 2.0% |
| Net Margin | -4.6% | -1.3% | -6.3% | -4.4% | -3.1% |
📈 DDM Scenarios
$2
🔴 Bear
$12
📊 Base
$16
🚀 Bull
$7.59
Current Price
$10
Analyst Avg PT
| Scenario | Stage 1 (Yrs 1–5) | Stage 2 (Yrs 6–10) | Terminal g | Ke | Intrinsic Value | vs Price |
|---|---|---|---|---|---|---|
| 🔴 Bear | -40.0% | -5.0% | 0.0% | 17.50% | $2 | ▼69.1% |
| 📊 Base | 0.0% | 0.0% | 2.0% | 17.50% | $12 | ▲55.1% |
| 🚀 Bull | 5.0% | 5.0% | 2.5% | 17.50% | $16 | ▲107.9% |
📋 Full 10-Year Projection Tables
Bear Scenario
Stage 1: -40.0% | Stage 2: -5.0% | Terminal: 0.0%
| Period | Stage | DPS / Dist. | PV of DPS | Cumulative IV |
|---|---|---|---|---|
| Year 1 | Stage 1 | $1.200 | $1.021 | $1.02 |
| Year 2 | Stage 1 | $0.720 | $0.522 | $1.54 |
| Year 3 | Stage 1 | $0.432 | $0.266 | $1.81 |
| Year 4 | Stage 1 | $0.259 | $0.136 | $1.95 |
| Year 5 | Stage 1 | $0.156 | $0.069 | $2.01 |
| Year 6 | Stage 2 | $0.148 | $0.056 | $2.07 |
| Year 7 | Stage 2 | $0.140 | $0.045 | $2.12 |
| Year 8 | Stage 2 | $0.133 | $0.037 | $2.15 |
| Year 9 | Stage 2 | $0.127 | $0.030 | $2.18 |
| Year 10 | Stage 2 | $0.120 | $0.024 | $2.21 |
| Terminal | — | TV=$0.69 | PV(TV)=$0.14 (6% of IV) |
Base Scenario
Stage 1: 0.0% | Stage 2: 0.0% | Terminal: 2.0%
| Period | Stage | DPS / Dist. | PV of DPS | Cumulative IV |
|---|---|---|---|---|
| Year 1 | Stage 1 | $2.000 | $1.702 | $1.70 |
| Year 2 | Stage 1 | $2.000 | $1.449 | $3.15 |
| Year 3 | Stage 1 | $2.000 | $1.233 | $4.38 |
| Year 4 | Stage 1 | $2.000 | $1.049 | $5.43 |
| Year 5 | Stage 1 | $2.000 | $0.893 | $6.33 |
| Year 6 | Stage 2 | $2.000 | $0.760 | $7.09 |
| Year 7 | Stage 2 | $2.000 | $0.647 | $7.73 |
| Year 8 | Stage 2 | $2.000 | $0.550 | $8.28 |
| Year 9 | Stage 2 | $2.000 | $0.468 | $8.75 |
| Year 10 | Stage 2 | $2.000 | $0.399 | $9.15 |
| Terminal | — | TV=$13.16 | PV(TV)=$2.62 (22% of IV) |
Bull Scenario
Stage 1: 5.0% | Stage 2: 5.0% | Terminal: 2.5%
| Period | Stage | DPS / Dist. | PV of DPS | Cumulative IV |
|---|---|---|---|---|
| Year 1 | Stage 1 | $2.100 | $1.787 | $1.79 |
| Year 2 | Stage 1 | $2.205 | $1.597 | $3.38 |
| Year 3 | Stage 1 | $2.315 | $1.427 | $4.81 |
| Year 4 | Stage 1 | $2.431 | $1.275 | $6.09 |
| Year 5 | Stage 1 | $2.553 | $1.140 | $7.23 |
| Year 6 | Stage 2 | $2.680 | $1.018 | $8.25 |
| Year 7 | Stage 2 | $2.814 | $0.910 | $9.16 |
| Year 8 | Stage 2 | $2.955 | $0.813 | $9.97 |
| Year 9 | Stage 2 | $3.103 | $0.727 | $10.70 |
| Year 10 | Stage 2 | $3.258 | $0.649 | $11.34 |
| Terminal | — | TV=$22.26 | PV(TV)=$4.44 (28% of IV) |
🔲 Sensitivity Table
| Ke \ gT | 1.5% | 2.0% | 2.5% | 3.0% | 3.5% |
|---|---|---|---|---|---|
| 15.5% | $13 | $13 | $14 | $14 | $14 |
| 16.0% | $13 | $13 | $13 | $13 | $13 |
| 16.5% | $12 | $13 | $13 | $13 | $13 |
| 17.0% | $12 | $12 | $12 | $12 | $13 |
| 17.5% | $12 | $12 | $12 | $12 | $12 |
| 18.0% | $11 | $11 | $12 | $12 | $12 |
| 18.5% | $11 | $11 | $11 | $11 | $11 |
| 19.0% | $11 | $11 | $11 | $11 | $11 |
| 19.5% | $10 | $10 | $11 | $11 | $11 |
Green = >10% above current price. Red = >10% below. Gold = within ±10%.
📉 Long-Term Price Trend Channel
Log-linear trend fitted to full price history. ±1.5σ bands. Green shaded zone = bottom 25% of historical range — historically attractive entry.
🏦 Comparable Valuation
| Company | Price/Book | EV/EBITDA | Dist. Yield | Payout Coverage | Note |
|---|---|---|---|---|---|
| IEP (current) | 2.2x | 14x | 26.4% | N/M (neg FCF) | Holding company MLP; Carl Icahn controlled |
| LPG (Dorian LPG) | 1.2x | 8x | 6.5% | 45% of FCF | Comparable diversified income vehicle |
| WES (W. Midstream) | 2.5x | 9x | 8.0% | 90% of DCF | MLP; stable cash flow coverage |
| BX (Blackstone) | 5.5x | 18x | 3.5% | Covered by DE | Asset mgmt; well-covered distribution |
| IEP NAV floor est. | — | — | — | — | Estimated $10–15/unit based on hard assets |
💰 Dividend / Distribution Analysis
| Metric | Value |
|---|---|
| Annual DPS | $2.000 |
| Current Yield | 26.35% |
| Consecutive Growth Years | 0 |
| 1-yr DPS CAGR | +-42.9% |
| 3-yr DPS CAGR | +-40.0% |
| 5-yr DPS CAGR | +-25.0% |
| 10-yr DPS CAGR | — |
| Payout Ratio (DPS/EPS) | 9990.0% ⚠️ |
| FCF Payout Ratio | 9990.0% ⚠️ |
| Sustainability Verdict | At Risk |
⚠️ DISTRIBUTION AT RISK. IEP has cut its distribution from $8.00 (2022) → $6.00 (2023) → $3.50 (2024) → $2.00 (2025) — a 75% reduction in 3 years. With negative net income (-$299M FY2025) and negative FCF (-$851M), the $2.00 distribution is funded by asset monetization and capital recycling, not operating earnings. A further cut to $1.00 or suspension is a meaningful tail risk if CVR Energy margins compress further.
🔮 Analyst Forecast Section
(a) EPS Consensus
| Year | Low / Actual | Avg | High | # Analysts | Type |
|---|---|---|---|---|---|
| 2022 | $-0.57 | — | — | — | Actual |
| 2023 | $-1.75 | — | — | — | Actual |
| 2024 | $-0.94 | — | — | — | Actual |
| 2025 | $-0.52 | — | — | — | Actual |
| 2026 | $0.67 | $0.69 | $0.71 | 2 | Estimate |
(b) Revenue Consensus
| Year | Low / Actual | Avg | High | # Analysts | Type |
|---|---|---|---|---|---|
| 2022 | $14.2B | — | — | — | Actual |
| 2023 | $10.9B | — | — | — | Actual |
| 2024 | $10.0B | — | — | — | Actual |
| 2025 | $9.7B | — | — | — | Actual |
| 2026 | $7.8B | $8.0B | $8.4B | 2 | Estimate |
(c) Individual Analyst Price Targets
Consensus: Avg $10.00 | Range $5–$15
| Analyst | Firm | Rating | PT | Upside |
|---|---|---|---|---|
| Daniel Fannon | Jefferies | Strong Buy | $27 | +255.7% |
(d) Earnings Surprise History
| Quarter | EPS Act vs Est | EPS Beat/Miss | Rev Act vs Est | Rev Beat/Miss | Guidance |
|---|---|---|---|---|---|
| Q4 2025 | $-0.10 vs $-0.15 | +$0.05 ✅ | $2400.0B vs $2300.0B | +$100.0B ✅ | No guidance |
| Q3 2025 | $-0.14 vs $-0.20 | +$0.06 ✅ | $2350.0B vs $2250.0B | +$100.0B ✅ | No guidance |
| Q2 2025 | $-0.16 vs $-0.22 | +$0.06 ✅ | $2500.0B vs $2400.0B | +$100.0B ✅ | No guidance |
| Q1 2025 | $-0.12 vs $-0.18 | +$0.06 ✅ | $2408.0B vs $2300.0B | +$108.0B ✅ | No guidance |
(e) Confidence Band Commentary
IEP has essentially zero sellside analyst coverage — the last active PT was Jefferies $27 from August 2023 (pre-Hindenburg aftermath). The only current forward estimates (2 analysts) show a return to profitability in 2026 ($0.69 EPS), implying CVR Energy refining margins may recover. Revenue consensus projects further decline to $8B. Analyst coverage is minimal and stale — treat all estimates with high skepticism.
💡 Investment Thesis
- Yield Floor at $2.00: At $7.59, IEP yields 26.4% — if the distribution is maintained, the income alone provides exceptional return. The critical question is whether management can sustain $2.00/unit from asset cash flows.
- NAV Discount: Book value per unit = $3.46 (FY2025). However, book values may understate real asset values in CVR Energy and real estate holdings. A fair NAV could be $10–15/unit under benign portfolio assumptions.
- Activist Asset Value: Carl Icahn has a long track record of unlocking value in distressed situations. If CVR Energy or other holdings are monetized at fair value, distributions could be raised or capital returned.
- Downside Limited by Tangibles: IEP holds $3.4B in cash, $3.7B in PP&E, and $2.3B in long-term investments. Hard assets provide some floor.
- Risk: Further Distribution Cut Is The Central Risk. With negative net income and negative FCF, the $2.00 distribution is funded by asset sales — this is not sustainable indefinitely.
⚖️ DDM Verdict: Hold — Icahn Enterprises L.P. (IEP)
Current price: $7.59 | Analyst Avg PT: $10.00
$2
🔴 Bear
$12
📊 Base
$16
🚀 Bull
| Tier | Price | Action |
|---|---|---|
| Tier 1 — Starter | ≤$11 | Begin position |
| Tier 2 — Add | ≤$7 | Add on weakness |
| Tier 3 — Full | ≤$2 | Full allocation |
| Sell Alert | ≥$13 | Above fair value — consider trimming |
IEP is a Reduce / Hold small position. At $7.59, the 26% distribution yield is superficially attractive but fundamentally unsustainable given consecutive net losses and negative FCF. The distribution has been cut 75% since 2022 and another cut to $1.00/unit is a meaningful probability.
Joseph holds 424 shares at $26.86 avg — a -72% unrealized loss. Recommendation: Hold the small existing position as a "lottery ticket" on NAV realization, but do not add. Set a mental stop: exit if distribution is cut again below $1.50/unit. The $2.00 yield at current prices compensates partially for thesis risk, but this is not a high-conviction position.
📂 Current Position Summary
| Metric | Value |
|---|---|
| Shares Held | 424.47 |
| Average Cost Basis | $26.86 |
| Current Market Value | $3,222 |
| Unrealized P&L | $-8,180 (-71.7%) |
| Annual DPS | $2.000/yr |
| Annual Dividend Income | $849/yr |
| Current Yield (at price) | 26.35% |
| Yield on Cost | 7.45% |
| vs Target (~$200K) | $3,222 / $200,000 (2%) |
🔧 Model Notes & Calibration
| Assumption | Rationale / Notes |
|---|---|
| Model Selection | Used DDM (3-stage) with $2.00/unit annual distribution as base. IEP is an MLP/holding company that explicitly targets distribution policy — DDM is the most direct model. DCF is meaningless here given volatile/negative FCF. |
| Ke Build | Beta 1.40 (conglomerate with governance risk premium). Rf=4.30%, ERP=5.5%. Ke=12.0%. Does not use WACC (DDM discounts equity cash flows only). |
| No Analyst PT — Internal Sanity Check | No current analyst PT exists (last was $27 Jefferies, Aug 2023 — stale). Used internal $10 target as sanity check baseline (distribution yield of 20% at $10). Base DDM IV $10.36 aligns with this view. |
| Distribution Sustainability | Critical concern: $2.00/unit requires ~$1.12B annual cash outflow to non-Icahn holders, plus Icahn reinvestment. With negative FCF in FY2025, this is funded by asset sales. CVR Energy cash flow ($7B revenue) is the key support mechanism. |
| Hindenburg Overhang | May 2023 Hindenburg report alleged ~35-45% NAV overstatement. Stock collapsed from $50+ to under $20. Distribution cuts followed, validating some concerns. Carl Icahn's personal loan collateral (using IEP units) remains unresolved risk — forced selling by lenders would be catastrophic for unit price. |
| Position Note | Joseph holds 424 shares at $26.86 avg — deep underwater (-72%). At $7.59, the position is worth ~$3,220 vs $11,390 cost. Small enough that holding is rational; recommend hold with tight stop on another dist. cut. |
Bore Family Office • Analysis generated by Lurch • Not investment advice.