CNP
CenterPoint Energy, Inc.
$39.11
Stable Earnings Power
85%
P/Adj-EPS × Normalized Multiple
Strong
·
Conviction
Overvalued
Trading 52.8% above fair value
You pay
$39.11
Bear
$22.40
Fair
$25.60
Bull
$28.80
Bear
$22.40
-42.7%
$1.60 × 14x P/E
Fair
$25.60
-34.5%
$1.60 × 16x P/E
Bull
$28.80
-26.4%
$1.60 × 18x P/E
Adjust Assumptions
16.0x
1.6$
Key Value Driver
Normalized P/E multiple (16x base case)
Implied Market Multiple
24.4x
Analyst Consensus (External Reference)
Never blended into the bear/base/bull estimates above.
Average Target (31 analysts)
$46.00
Divergence from AlphaVal
44%
Summary
Applying a 16x P/E to adjusted EPS of $1.60, the base-case value is $25.60 per share. DDM cross-check: $46.90.
Warnings
Dividend-based valuation: $46.90 (above our primary estimate by 83%). Large gaps may signal the dividend doesn't reflect full earning power.
Wall Street's average price target is $46.00 (from 31 analysts). Our estimate is 44% 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