FELE
Franklin Electric Co., Inc.
$104.29
Stable Earnings Power
65%
P/Adj-EPS × Normalized Multiple
Strong
·
Conviction
Overvalued
Trading 60.5% above fair value
You pay
$104.29
Bear
$51.99
Fair
$64.99
Bull
$77.99
Bear
$51.99
-50.1%
$3.66 × 12x P/E
Fair
$64.99
-37.7%
$3.66 × 15x P/E
Bull
$77.99
-25.2%
$3.66 × 18x P/E
Key Value Driver
Normalized P/E multiple (15x base case)
Implied Market Multiple
28.5x
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 $100.00 from 11 analysts, using a 20% weight on analyst consensus. That produces an estimated intrinsic value of $64.99 per share.
Warnings
Wall Street's average price target is $100.00 (from 11 analysts). Our estimate is 44% 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