GGG
Graco Inc.
$66.63
Stable Earnings Power
65%
P/Adj-EPS × Normalized Multiple
Strong
·
Conviction
Overvalued
Trading 44.2% above fair value
You pay
$66.63
Bear
$36.96
Fair
$46.20
Bull
$55.44
Bear
$36.96
-44.5%
$3.08 × 12x P/E
Fair
$46.20
-30.7%
$3.08 × 15x P/E
Bull
$55.44
-16.8%
$3.08 × 18x P/E
Adjust Assumptions
15.0x
3.08$
Key Value Driver
Normalized P/E multiple (15x base case)
Implied Market Multiple
21.6x
Analyst Consensus (External Reference)
Never blended into the bear/base/bull estimates above.
Average Target (21 analysts)
$81.00
Divergence from AlphaVal
43%
Summary
Applying a 15x P/E to adjusted EPS of $3.08, the base-case value is $46.20 per share. DDM cross-check: $130.70.
Warnings
Dividend-based valuation: $130.70 (above our primary estimate by 183%). Large gaps may signal the dividend doesn't reflect full earning power.
Wall Street's average price target is $81.00 (from 21 analysts). Our estimate is 43% 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