AWR
American States Water Company
$76.64
Stable Earnings Power
85%
P/Adj-EPS × Normalized Multiple
Moderate
·
Conviction
Overvalued
Trading 25.6% above fair value
You pay
$76.64
Bear
$53.41
Fair
$61.04
Bull
$68.67
Bear
$53.41
-30.3%
$3.37 × 14x P/E
Fair
$61.04
-20.4%
$3.37 × 16x P/E
Bull
$68.67
-10.4%
$3.37 × 18x P/E
Key Value Driver
Normalized P/E multiple (16x base case)
Implied Market Multiple
22.7x
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 $89.50 from 10 analysts, using a 20% weight on analyst consensus. That produces an estimated intrinsic value of $61.04 per share.
Warnings
Dividend-based valuation: $161.24 (above our primary estimate by 199%). Large gaps may signal the dividend doesn't reflect full earning power.
Wall Street's average price target is $89.50 (from 10 analysts). Our estimate is 40% 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