EBR
AXIA Energia S.A.
$9.20
Stable Earnings Power
85%
P/Adj-EPS × Normalized Multiple
Moderate
·
Conviction
Undervalued
Trading 36.2% below fair value
You pay
$9.20
Bear
$12.61
Fair
$14.41
Bull
$16.21
Bear
$12.61
+37.1%
$0.90 × 14x P/E
Fair
$14.41
+56.6%
$0.90 × 16x P/E
Bull
$16.21
+76.2%
$0.90 × 18x P/E
Adjust Assumptions
16.0x
0.9$
Key Value Driver
Normalized P/E multiple (16x base case)
Implied Market Multiple
10.2x
Summary
Applying a 16x P/E to adjusted EPS of $0.90, the base-case value is $14.41 per share.
Warnings
The company pays out 107% of its profits as dividends. That leaves little cushion — the dividend could be cut if business slows down.
Financial statements were converted from BRL into USD using USDBRL at 0.2001 USD per BRL.
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