CENTA
Central Garden & Pet Company
$38.29
Stable Earnings Power
80%
P/Adj-EPS × Normalized Multiple
Moderate
·
Conviction
Undervalued
Trading 27.3% below fair value
You pay
$38.29
Bear
$43.35
Fair
$52.64
Bull
$61.93
Bear
$43.35
+13.2%
$3.09 × 14x P/E
Fair
$52.64
+37.5%
$3.09 × 17x P/E
Bull
$61.93
+61.7%
$3.09 × 20x P/E
Key Value Driver
Normalized P/E multiple (17x base case)
Implied Market Multiple
12.4x
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 $53.00 from 13 analysts, using a 20% weight on analyst consensus. That produces an estimated intrinsic value of $52.64 per share.
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