AVA
Avista Corporation
$41.86
Stable Earnings Power
85%
P/Adj-EPS × Normalized Multiple
Mild
·
Conviction
Overvalued
Trading 9.3% above fair value
You pay
$41.86
Bear
$33.52
Fair
$38.31
Bull
$43.10
Bear
$33.52
-19.9%
$2.38 × 14x P/E
Fair
$38.31
-8.5%
$2.38 × 16x P/E
Bull
$43.10
+3.0%
$2.38 × 18x P/E
Key Value Driver
Normalized P/E multiple (16x base case)
Implied Market Multiple
17.6x
Summary
Our base-case estimate uses a valuation based on adjusted earnings per share and a normalized price-to-earnings multiple. We then blend that result with the average analyst price target of $39.00 from 15 analysts, using a 25% weight on analyst consensus. That produces an estimated intrinsic value of $38.31 per share.
Warnings
The company pays out 83% of its profits as dividends. That leaves little cushion — the dividend could be cut if business slows down.
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