OSHKOSH CORP (OSK) stock intrinsic value fair value estimate & owner earnings analysis

Oshkosh makes access equipment (JLG lifts and telehandlers), vocational trucks (Pierce fire apparatus, McNeilus refuse trucks) and specialty transport vehicles, including the U.S. Postal Service's next-generation delivery van. Over the past decade the cash owners actually keep - operating cash flow less all capital spending and stock compensation - has swung violently: roughly $1.80 a share in fiscal 2017, a distorted $15.60 in fiscal 2021 when defense customers prepaid heavily, $3.40 in 2024 and $8.27 in 2025, averaging about $5.60 over the decade. Much of that swing is explainable. From 2022 through 2024 capital spending ran $100 to $170 million a year above depreciation to build the Postal Service plant in South Carolina and add capacity, while inventory and contract costs absorbed more cash. Strip that expansion spending out and those years were worth $5 to $7 a share. By 2025 the build-out was done, capital spending fell below depreciation, and cash generation recovered sharply. The business has three very different parts. Vocational is the good one: sales up 13% in 2025, operating margin up to 14.7%, and a $6.6 billion order book still growing on municipal demand and firm pricing. Access is the cyclical one: sales fell 13%, margin dropped more than four points on softer construction demand and discounting, and backlog fell 30%. Transport is the lumpy one: a large military truck contract has ended, mail-van production is ramping to replace it, margins are thin, and negative contract revisions keep appearing, $33 million in 2025 and $45 million in 2024. The bear case assumes the access downturn deepens and lingers, tariffs management sizes at roughly $200 million for 2026 are not recovered in price, and the mail-van program keeps generating charges, leaving owner earnings near $6 a share growing only with inflation, discounted at 11.5%. That is worth about $55. The base case starts near $8.50, close to what 2025 produced, grows it 4% a year on vocational strength and steady buybacks, and discounts at 9.5%, giving roughly $129. The bull case has access recovering by 2028 and mail-van volumes at full rate on decent margins, growing 6% a year discounted at 8.75%, worth about $188. Each subtracts about $9.60 a share of net debt, modest against operating profit near $1 billion. We are moderately confident, call it 70%. The record is genuinely cyclical, about 44% of sales sit in the segment now declining, and the mail-van program is a large, low-margin contract with a history of unfavorable revisions. Offsetting that, borrowings are conservative, backlog is $14.2 billion, and the dividend has risen by a double-digit percentage twelve years running. Given how wide those swings are we want a large margin of safety, and would look to pay around $70 a share. The underlying financial data was complete for all ten years, so nothing had to be estimated.