CMS
CMS Energy Corporation
$65.34
Stable Earnings Power
85%
P/Adj-EPS × Normalized Multiple
Moderate
·
Conviction
Overvalued
Trading 15.7% above fair value
You pay
$65.34
Bear
$49.42
Fair
$56.48
Bull
$63.54
Bear
$49.42
-24.4%
$3.53 × 14x P/E
Fair
$56.48
-13.6%
$3.53 × 16x P/E
Bull
$63.54
-2.8%
$3.53 × 18x P/E
Adjust Assumptions
16.0x
3.53$
Key Value Driver
Normalized P/E multiple (16x base case)
Implied Market Multiple
18.5x
Analyst Consensus (External Reference)
Never blended into the bear/base/bull estimates above.
Average Target (30 analysts)
$78.45
Divergence from AlphaVal
28%
Summary
Applying a 16x P/E to adjusted EPS of $3.53, the base-case value is $56.48 per share. DDM cross-check: $65.58.
Warnings
Wall Street's average price target is $78.45 (from 30 analysts). Our estimate is 28% 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