AVNS
Avanos Medical, Inc.
$24.61
Stable Earnings Power
40%
P/Adj-EPS × Normalized Multiple
Strong
·
Conviction
Overvalued
Trading 41.1% above fair value
You pay
$24.61
Bear
$13.95
Fair
$17.44
Bull
$20.93
Bear
$13.95
-43.3%
$1.07 × 12x P/E
Fair
$17.44
-29.1%
$1.07 × 15x P/E
Bull
$20.93
-15.0%
$1.07 × 18x P/E
Key Value Driver
Normalized P/E multiple (15x base case)
Implied Market Multiple
23.0x
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 $23.00 from 8 analysts, using a 20% weight on analyst consensus. That produces an estimated intrinsic value of $17.44 per share.
Warnings
Wall Street's average price target is $23.00 (from 8 analysts). Our estimate is 30% 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