HNI
HNI Corporation
$48.41
Stable Earnings Power
80%
P/Adj-EPS × Normalized Multiple
Strong
·
Conviction
Overvalued
Trading 68.7% above fair value
You pay
$48.41
Bear
$25.12
Fair
$28.70
Bull
$32.29
Bear
$25.12
-48.1%
$1.79 × 14x P/E
Fair
$28.70
-40.7%
$1.79 × 16x P/E
Bull
$32.29
-33.3%
$1.79 × 18x P/E
Adjust Assumptions
16.0x
1.79$
Key Value Driver
Normalized P/E multiple (16x base case)
Implied Market Multiple
27.0x
Summary
Applying a 16x P/E to adjusted EPS of $1.79, the base-case value is $28.70 per share. DDM cross-check: $22.80.
Warnings
The company's reported profits differ from official accounting profits by 62%. Check what costs are being left out of the adjusted number.
The company pays out 124% of its profits as dividends. That leaves little cushion — the dividend could be cut if business slows down.
Dividend-based valuation: $22.80 (below our primary estimate by 21%). Large gaps may signal the dividend doesn't reflect full earning power.
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