DLX
Deluxe Corporation
$23.73
Stable Earnings Power
40%
P/Adj-EPS × Normalized Multiple
Moderate
·
Conviction
Undervalued
Trading 28.9% below fair value
You pay
$23.73
Bear
$26.70
Fair
$33.38
Bull
$40.05
Bear
$26.70
+12.5%
$2.33 × 12x P/E
Fair
$33.38
+40.6%
$2.33 × 15x P/E
Bull
$40.05
+68.8%
$2.33 × 18x P/E
Key Value Driver
Normalized P/E multiple (15x base case)
Implied Market Multiple
10.2x
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 $27.00 from 6 analysts, using a 20% weight on analyst consensus. That produces an estimated intrinsic value of $33.38 per share.
Warnings
Wall Street's average price target is $27.00 (from 6 analysts). Our estimate is 30% above 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