GTES
Gates Industrial Corporation plc
$26.67
Stable Earnings Power
40%
P/Adj-EPS × Normalized Multiple
Strong
·
Conviction
Overvalued
Trading 85.2% above fair value
You pay
$26.67
Bear
$11.52
Fair
$14.40
Bull
$17.28
Bear
$11.52
-56.8%
$0.96 × 12x P/E
Fair
$14.40
-46.0%
$0.96 × 15x P/E
Bull
$17.28
-35.2%
$0.96 × 18x P/E
Adjust Assumptions
15.0x
0.96$
Key Value Driver
Normalized P/E multiple (15x base case)
Implied Market Multiple
27.8x
Analyst Consensus (External Reference)
Never blended into the bear/base/bull estimates above.
Average Target (15 analysts)
$31.40
Divergence from AlphaVal
54%
Summary
Applying a 15x P/E to adjusted EPS of $0.96, the base-case value is $14.40 per share.
Warnings
Wall Street's average price target is $31.40 (from 15 analysts). Our estimate is 54% 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