FLO
Flowers Foods, Inc.
$5.81
Stable Earnings Power
80%
P/Adj-EPS × Normalized Multiple
Strong
·
Conviction
Undervalued
Trading 64.8% below fair value
You pay
$5.81
Bear
$13.58
Fair
$16.49
Bull
$19.40
Bear
$13.58
+133.7%
$0.97 × 14x P/E
Fair
$16.49
+183.8%
$0.97 × 17x P/E
Bull
$19.40
+233.9%
$0.97 × 20x P/E
Adjust Assumptions
17.0x
0.97$
Key Value Driver
Normalized P/E multiple (17x base case)
Implied Market Multiple
6.0x
Analyst Consensus (External Reference)
Never blended into the bear/base/bull estimates above.
Average Target (20 analysts)
$5.67
Divergence from AlphaVal
191%
Summary
Applying a 17x P/E to adjusted EPS of $0.97, the base-case value is $16.49 per share.
Warnings
The company's reported profits differ from official accounting profits by 142%. Check what costs are being left out of the adjusted number.
The company pays out 186% of its profits as dividends. That leaves little cushion — the dividend could be cut if business slows down.
Wall Street's average price target is $5.67 (from 20 analysts). Our estimate is 191% 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