CWT
California Water Service Group
$43.95
Stable Earnings Power
85%
P/Adj-EPS × Normalized Multiple
Mild
·
Conviction
Overvalued
Trading 13.3% above fair value
You pay
$43.95
Bear
$33.93
Fair
$38.78
Bull
$43.62
Bear
$33.93
-22.8%
$2.19 × 14x P/E
Fair
$38.78
-11.8%
$2.19 × 16x P/E
Bull
$43.62
-0.7%
$2.19 × 18x P/E
Key Value Driver
Normalized P/E multiple (16x base case)
Implied Market Multiple
20.1x
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 $54.00 from 10 analysts, using a 20% weight on analyst consensus. That produces an estimated intrinsic value of $38.78 per share.
Warnings
Dividend-based valuation: $59.86 (above our primary estimate by 71%). Large gaps may signal the dividend doesn't reflect full earning power.
Wall Street's average price target is $54.00 (from 10 analysts). Our estimate is 35% 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