BLCO
Bausch + Lomb Corporation
$16.61
Stable Earnings Power
40%
P/Adj-EPS × Normalized Multiple
Mild
·
Conviction
Overvalued
Trading 15.0% above fair value
You pay
$16.61
Bear
$11.56
Fair
$14.45
Bull
$17.33
Bear
$11.56
-30.4%
$0.86 × 12x P/E
Fair
$14.45
-13.0%
$0.86 × 15x P/E
Bull
$17.33
+4.4%
$0.86 × 18x P/E
Key Value Driver
Normalized P/E multiple (15x base case)
Implied Market Multiple
19.3x
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 $18.33 from 16 analysts, using a 25% weight on analyst consensus. That produces an estimated intrinsic value of $14.45 per share.
Warnings
Wall Street's average price target is $18.33 (from 16 analysts). Our estimate is 28% 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