GHM
Graham Corporation
$107.79
Stable Earnings Power
40%
P/Adj-EPS × Normalized Multiple
Strong
·
Conviction
Overvalued
Trading 100.5% above fair value
You pay
$107.79
Bear
$43.01
Fair
$53.77
Bull
$64.51
Bear
$43.01
-60.1%
$1.51 × 18x P/E
Fair
$53.77
-50.1%
$1.51 × 22x P/E
Bull
$64.51
-40.1%
$1.51 × 27x P/E
Key Value Driver
Normalized P/E multiple (22x base case)
Implied Market Multiple
71.2x
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 $132.50 from 6 analysts, using a 20% weight on analyst consensus. That produces an estimated intrinsic value of $53.77 per share.
Warnings
The company's reported profits differ from official accounting profits by 35%. Check what costs are being left out of the adjusted number.
Dividend-based valuation: $11.73 (below our primary estimate by 66%). Large gaps may signal the dividend doesn't reflect full earning power.
Wall Street's average price target is $132.50 (from 6 analysts). Our estimate is 74% 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