HNI
HNI Corporation
$30.70
Stable Earnings Power
65%
P/Adj-EPS × Normalized Multiple
Moderate
·
Conviction
Undervalued
Trading 31.6% below fair value
You pay
$30.70
Bear
$35.93
Fair
$44.91
Bull
$53.89
Bear
$35.93
+17.0%
$2.99 × 12x P/E
Fair
$44.91
+46.3%
$2.99 × 15x P/E
Bull
$53.89
+75.5%
$2.99 × 18x P/E
Key Value Driver
Normalized P/E multiple (15x base case)
Implied Market Multiple
10.3x
Summary
Applying a 15x P/E to adjusted EPS of $2.99, the base-case value is $44.91 per share. DDM cross-check: $22.69.
Warnings
The company's reported profits differ from official accounting profits by 170%. Check what costs are being left out of the adjusted number.
The company pays out 123% of its profits as dividends. That leaves little cushion — the dividend could be cut if business slows down.
Dividend-based valuation: $22.69 (below our primary estimate by 49%). 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