GGG
Graco Inc.
$75.72
Stable Earnings Power
65%
P/Adj-EPS × Normalized Multiple
Moderate
·
Conviction
Overvalued
Trading 26.2% above fair value
You pay
$75.72
Bear
$48.00
Fair
$59.99
Bull
$71.99
Bear
$48.00
-36.6%
$3.23 × 12x P/E
Fair
$59.99
-20.8%
$3.23 × 15x P/E
Bull
$71.99
-4.9%
$3.23 × 18x P/E
Key Value Driver
Normalized P/E multiple (15x base case)
Implied Market Multiple
23.5x
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 $94.67 from 20 analysts, using a 25% weight on analyst consensus. That produces an estimated intrinsic value of $59.99 per share.
Warnings
Dividend-based valuation: $162.84 (above our primary estimate by 236%). Large gaps may signal the dividend doesn't reflect full earning power.
Wall Street's average price target is $94.67 (from 20 analysts). Our estimate is 49% 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