HPQ HP Inc.
$23.54
Stable Earnings Power 40%
P/Adj-EPS × Normalized Multiple
Moderate · Conviction

Undervalued

Trading 30.4% below fair value

You pay $23.54
Bear $27.04
Fair $33.80
Bull $40.56
Bear $27.04 +14.9% $2.75 × 12x P/E
Fair $33.80 +43.6% $2.75 × 15x P/E
Bull $40.56 +72.3% $2.75 × 18x P/E

Key Value Driver

Normalized P/E multiple (15x base case)

Implied Market Multiple 8.5x

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 $19.83 from 52 analysts, using a 35% weight on analyst consensus. That produces an estimated intrinsic value of $33.80 per share.

Warnings

Dividend-based valuation: $29.04 (below our primary estimate by 30%). Large gaps may signal the dividend doesn't reflect full earning power.
Wall Street's average price target is $19.83 (from 52 analysts). Our estimate is 108% above 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