EBR
AXIA Energia S.A.
$9.20
Stable Earnings Power
85%
P/Adj-EPS × Normalized Multiple
Moderate
·
Conviction
Undervalued
Trading 34.7% below fair value
You pay
$9.20
Bear
$12.33
Fair
$14.09
Bull
$15.85
Bear
$12.33
+34.0%
$0.88 × 14x P/E
Fair
$14.09
+53.2%
$0.88 × 16x P/E
Bull
$15.85
+72.3%
$0.88 × 18x P/E
Adjust Assumptions
16.0x
0.88$
Key Value Driver
Normalized P/E multiple (16x base case)
Implied Market Multiple
10.4x
Summary
Applying a 16x P/E to adjusted EPS of $0.88, the base-case value is $14.09 per share.
Warnings
The company pays out 110% 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 0.1957 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