DOW
Dow Inc.
$29.03
Stable Earnings Power
40%
P/Adj-EPS × Normalized Multiple
Moderate
·
Conviction
Undervalued
Trading 35.7% below fair value
You pay
$29.03
Bear
$36.10
Fair
$45.13
Bull
$54.15
Bear
$36.10
+24.3%
$3.26 × 12x P/E
Fair
$45.13
+55.4%
$3.26 × 15x P/E
Bull
$54.15
+86.5%
$3.26 × 18x P/E
Key Value Driver
Normalized P/E multiple (15x base case)
Implied Market Multiple
8.9x
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 $36.25 from 36 analysts, using a 30% weight on analyst consensus. That produces an estimated intrinsic value of $45.13 per share.
Warnings
Wall Street's average price target is $36.25 (from 36 analysts). Our estimate is 35% 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