GHM
Graham Corporation
$66.10
Stable Earnings Power
40%
P/Adj-EPS × Normalized Multiple
Strong
·
Conviction
Overvalued
Trading 162.3% above fair value
You pay
$66.10
Bear
$20.16
Fair
$25.20
Bull
$30.24
Bear
$20.16
-69.5%
$1.12 × 18x P/E
Fair
$25.20
-61.9%
$1.12 × 22x P/E
Bull
$30.24
-54.3%
$1.12 × 27x P/E
Adjust Assumptions
22.5x
1.12$
Key Value Driver
Normalized P/E multiple (22x base case)
Implied Market Multiple
59.0x
Analyst Consensus (External Reference)
Never blended into the bear/base/bull estimates above.
Average Target (6 analysts)
$125.00
Divergence from AlphaVal
80%
Summary
Applying a 22x P/E to adjusted EPS of $1.12, the base-case value is $25.20 per share. DDM cross-check: $11.73.
Warnings
Dividend-based valuation: $11.73 (below our primary estimate by 53%). Large gaps may signal the dividend doesn't reflect full earning power.
Wall Street's average price target is $125.00 (from 6 analysts). Our estimate is 80% 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