BW
Babcock & Wilcox Enterprises, Inc.
$19.04
Stable Earnings Power
40%
P/Adj-EPS × Normalized Multiple
Strong
·
Conviction
Overvalued
Trading 160.1% above fair value
You pay
$19.04
Bear
$5.86
Fair
$7.32
Bull
$8.78
Bear
$5.86
-69.2%
$0.26 × 12x P/E
Fair
$7.32
-61.6%
$0.26 × 15x P/E
Bull
$8.78
-53.9%
$0.26 × 18x P/E
Key Value Driver
Normalized P/E multiple (15x base case)
Implied Market Multiple
73.2x
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 $21.00 from 7 analysts, using a 20% weight on analyst consensus. That produces an estimated intrinsic value of $7.32 per share.
Warnings
Wall Street's average price target is $21.00 (from 7 analysts). Our estimate is 81% 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