CENTA
Central Garden & Pet Company
$34.57
Stable Earnings Power
80%
P/Adj-EPS × Normalized Multiple
Moderate
·
Conviction
Undervalued
Trading 33.6% below fair value
You pay
$34.57
Bear
$42.86
Fair
$52.04
Bull
$61.22
Bear
$42.86
+24.0%
$3.09 × 14x P/E
Fair
$52.04
+50.5%
$3.09 × 17x P/E
Bull
$61.22
+77.1%
$3.09 × 20x P/E
Key Value Driver
Normalized P/E multiple (17x base case)
Implied Market Multiple
11.2x
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 $50.00 from 13 analysts, using a 20% weight on analyst consensus. That produces an estimated intrinsic value of $52.04 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