AOS
A. O. Smith Corporation
$59.65
Stable Earnings Power
65%
P/Adj-EPS × Normalized Multiple
Mild
·
Conviction
Overvalued
Trading 3.0% above fair value
You pay
$59.65
Bear
$46.32
Fair
$57.90
Bull
$69.48
Bear
$46.32
-22.3%
$3.86 × 12x P/E
Fair
$57.90
-2.9%
$3.86 × 15x P/E
Bull
$69.48
+16.5%
$3.86 × 18x P/E
Adjust Assumptions
15.0x
3.86$
Key Value Driver
Normalized P/E multiple (15x base case)
Implied Market Multiple
15.5x
Analyst Consensus (External Reference)
Never blended into the bear/base/bull estimates above.
Average Target (30 analysts)
$67.00
Divergence from AlphaVal
14%
Summary
Applying a 15x P/E to adjusted EPS of $3.86, the base-case value is $57.90 per share. DDM cross-check: $52.40.
Key Risks
- Growth DCF inappropriate — terminal value assumptions dominate
- EV/EBITDA misleading for regulated businesses where capex is mandated
- Regulatory risk is a fat tail not visible in normal multiples