CMS
CMS Energy Corporation
$74.53
Stable Earnings Power
85%
P/Adj-EPS × Normalized Multiple
Moderate
·
Conviction
Overvalued
Trading 17.0% above fair value
You pay
$74.53
Bear
$55.73
Fair
$63.69
Bull
$71.65
Bear
$55.73
-25.2%
$3.53 × 14x P/E
Fair
$63.69
-14.5%
$3.53 × 16x P/E
Bull
$71.65
-3.9%
$3.53 × 18x P/E
Key Value Driver
Normalized P/E multiple (16x base case)
Implied Market Multiple
21.1x
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 $80.50 from 30 analysts, using a 30% weight on analyst consensus. That produces an estimated intrinsic value of $63.69 per share.
Warnings
Wall Street's average price target is $80.50 (from 30 analysts). Our estimate is 30% 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