HNI
HNI Corporation
$40.57
Stable Earnings Power
80%
P/Adj-EPS × Normalized Multiple
Moderate
·
Conviction
Overvalued
Trading 31.1% above fair value
You pay
$40.57
Bear
$27.07
Fair
$30.94
Bull
$34.81
Bear
$27.07
-33.3%
$1.93 × 14x P/E
Fair
$30.94
-23.7%
$1.93 × 16x P/E
Bull
$34.81
-14.2%
$1.93 × 18x P/E
Key Value Driver
Normalized P/E multiple (16x base case)
Implied Market Multiple
21.0x
Summary
Applying a 16x P/E to adjusted EPS of $1.93, the base-case value is $30.94 per share. DDM cross-check: $22.69.
Warnings
The company's reported profits differ from official accounting profits by 74%. 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 27%). 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