GATX
GATX Corporation
$169.67
Stable Earnings Power
40%
P/Adj-EPS × Normalized Multiple
Mild
·
Conviction
Overvalued
Trading 10.6% above fair value
You pay
$169.67
Bear
$122.75
Fair
$153.44
Bull
$184.13
Bear
$122.75
-27.7%
$9.12 × 12x P/E
Fair
$153.44
-9.6%
$9.12 × 15x P/E
Bull
$184.13
+8.5%
$9.12 × 18x P/E
Key Value Driver
Normalized P/E multiple (15x base case)
Implied Market Multiple
18.6x
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 $220.00 from 14 analysts, using a 20% weight on analyst consensus. That produces an estimated intrinsic value of $153.44 per share.
Warnings
Dividend-based valuation: $75.43 (below our primary estimate by 45%). 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