BBY
Best Buy Co., Inc.
$90.27
Stable Earnings Power
80%
P/Adj-EPS × Normalized Multiple
Mild
·
Conviction
Overvalued
Trading 11.9% above fair value
You pay
$90.27
Bear
$70.56
Fair
$80.64
Bull
$90.72
Bear
$70.56
-21.8%
$5.04 × 14x P/E
Fair
$80.64
-10.7%
$5.04 × 16x P/E
Bull
$90.72
+0.5%
$5.04 × 18x P/E
Adjust Assumptions
16.0x
5.04$
Key Value Driver
Normalized P/E multiple (16x base case)
Implied Market Multiple
17.9x
Analyst Consensus (External Reference)
Never blended into the bear/base/bull estimates above.
Average Target (41 analysts)
$84.08
Divergence from AlphaVal
4%
Summary
Applying a 16x P/E to adjusted EPS of $5.04, the base-case value is $80.64 per share. DDM cross-check: $75.35.
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