ASH
Ashland Inc.
$72.65
Stable Earnings Power
40%
P/Adj-EPS × Normalized Multiple
Strong
·
Conviction
Overvalued
Trading 43.3% above fair value
You pay
$72.65
Bear
$40.56
Fair
$50.70
Bull
$60.84
Bear
$40.56
-44.2%
$3.38 × 12x P/E
Fair
$50.70
-30.2%
$3.38 × 15x P/E
Bull
$60.84
-16.3%
$3.38 × 18x P/E
Adjust Assumptions
15.0x
3.38$
Key Value Driver
Normalized P/E multiple (15x base case)
Implied Market Multiple
21.5x
Analyst Consensus (External Reference)
Never blended into the bear/base/bull estimates above.
Average Target (25 analysts)
$78.29
Divergence from AlphaVal
35%
Summary
Applying a 15x P/E to adjusted EPS of $3.38, the base-case value is $50.70 per share. DDM cross-check: $74.39.
Warnings
Dividend-based valuation: $74.39 (above our primary estimate by 47%). Large gaps may signal the dividend doesn't reflect full earning power.
Wall Street's average price target is $78.29 (from 25 analysts). Our estimate is 35% below the consensus -- consider that gap carefully.
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