GATX
GATX Corporation
$178.11
Stable Earnings Power
40%
P/Adj-EPS × Normalized Multiple
Moderate
·
Conviction
Overvalued
Trading 30.2% above fair value
You pay
$178.11
Bear
$109.44
Fair
$136.80
Bull
$164.16
Bear
$109.44
-38.6%
$9.12 × 12x P/E
Fair
$136.80
-23.2%
$9.12 × 15x P/E
Bull
$164.16
-7.8%
$9.12 × 18x P/E
Adjust Assumptions
15.0x
9.12$
Key Value Driver
Normalized P/E multiple (15x base case)
Implied Market Multiple
19.5x
Analyst Consensus (External Reference)
Never blended into the bear/base/bull estimates above.
Average Target (14 analysts)
$220.00
Divergence from AlphaVal
38%
Summary
Applying a 15x P/E to adjusted EPS of $9.12, the base-case value is $136.80 per share. DDM cross-check: $81.80.
Warnings
Dividend-based valuation: $81.80 (below our primary estimate by 40%). Large gaps may signal the dividend doesn't reflect full earning power.
Wall Street's average price target is $220.00 (from 14 analysts). Our estimate is 38% 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