CIG
Companhia Energética de Minas Gerais
$2.30
Stable Earnings Power
85%
P/Adj-EPS × Normalized Multiple
Strong
·
Conviction
Undervalued
Trading 60.7% below fair value
You pay
$2.30
Bear
$5.12
Fair
$5.86
Bull
$6.59
Bear
$5.12
+122.7%
$0.32 × 16x P/E
Fair
$5.86
+154.6%
$0.32 × 19x P/E
Bull
$6.59
+186.4%
$0.32 × 21x P/E
Adjust Assumptions
18.5x
0.32$
Key Value Driver
Normalized P/E multiple (19x base case)
Implied Market Multiple
7.3x
Analyst Consensus (External Reference)
Never blended into the bear/base/bull estimates above.
Average Target (5 analysts)
$2.10
Divergence from AlphaVal
179%
Summary
Applying a 19x P/E to adjusted EPS of $0.32, the base-case value is $5.86 per share.
Warnings
Wall Street's average price target is $2.10 (from 5 analysts). Our estimate is 179% above the consensus -- consider that gap carefully.
Financial statements were converted from BRL into USD using USDBRL at 0.1862 USD per BRL.
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