CNP
CenterPoint Energy, Inc.
$42.83
Stable Earnings Power
85%
P/Adj-EPS × Normalized Multiple
Moderate
·
Conviction
Overvalued
Trading 37.6% above fair value
You pay
$42.83
Bear
$27.23
Fair
$31.12
Bull
$35.01
Bear
$27.23
-36.4%
$1.60 × 14x P/E
Fair
$31.12
-27.3%
$1.60 × 16x P/E
Bull
$35.01
-18.3%
$1.60 × 18x P/E
Key Value Driver
Normalized P/E multiple (16x base case)
Implied Market Multiple
26.8x
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 $44.00 from 31 analysts, using a 30% weight on analyst consensus. That produces an estimated intrinsic value of $31.12 per share.
Warnings
Dividend-based valuation: $49.73 (above our primary estimate by 94%). Large gaps may signal the dividend doesn't reflect full earning power.
Wall Street's average price target is $44.00 (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