HSIC
Henry Schein, Inc.
$74.21
Stable Earnings Power
80%
P/Adj-EPS × Normalized Multiple
Mild
·
Conviction
Overvalued
Trading 10.5% above fair value
You pay
$74.21
Bear
$53.74
Fair
$67.18
Bull
$80.61
Bear
$53.74
-27.6%
$3.96 × 12x P/E
Fair
$67.18
-9.5%
$3.96 × 15x P/E
Bull
$80.61
+8.6%
$3.96 × 18x P/E
Key Value Driver
Normalized P/E multiple (15x base case)
Implied Market Multiple
18.8x
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 $85.43 from 32 analysts, using a 30% weight on analyst consensus. That produces an estimated intrinsic value of $67.18 per share.
Warnings
Wall Street's average price target is $85.43 (from 32 analysts). Our estimate is 31% 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