CNP
CenterPoint Energy, Inc.
$41.20
Stable Earnings Power
85%
P/Adj-EPS × Normalized Multiple
Strong
·
Conviction
Overvalued
Trading 60.9% above fair value
You pay
$41.20
Bear
$22.40
Fair
$25.60
Bull
$28.80
Bear
$22.40
-45.6%
$1.60 × 14x P/E
Fair
$25.60
-37.9%
$1.60 × 16x P/E
Bull
$28.80
-30.1%
$1.60 × 18x P/E
Adjust Assumptions
16.0x
1.6$
Key Value Driver
Normalized P/E multiple (16x base case)
Implied Market Multiple
25.8x
Analyst Consensus (External Reference)
Never blended into the bear/base/bull estimates above.
Average Target (31 analysts)
$44.33
Divergence from AlphaVal
42%
Summary
Applying a 16x P/E to adjusted EPS of $1.60, the base-case value is $25.60 per share. DDM cross-check: $51.75.
Warnings
Dividend-based valuation: $51.75 (above our primary estimate by 102%). Large gaps may signal the dividend doesn't reflect full earning power.
Wall Street's average price target is $44.33 (from 31 analysts). Our estimate is 42% 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