MEI
Methode Electronics, Inc.
$15.12
Stable Earnings Power
40%
P/Adj-EPS × Normalized Multiple
Mild
·
Conviction
Fair Value
Trading 3.4% below fair value
You pay
$15.12
Bear
$12.53
Fair
$15.66
Bull
$18.79
Bear
$12.53
-17.1%
$1.04 × 12x P/E
Fair
$15.66
+3.6%
$1.04 × 15x P/E
Bull
$18.79
+24.3%
$1.04 × 18x P/E
Adjust Assumptions
15.0x
1.04$
Key Value Driver
Normalized P/E multiple (15x base case)
Implied Market Multiple
14.5x
Analyst Consensus (External Reference)
Never blended into the bear/base/bull estimates above.
Average Target (6 analysts)
$25.25
Divergence from AlphaVal
38%
Summary
Applying a 15x P/E to adjusted EPS of $1.04, the base-case value is $15.66 per share.
Warnings
Wall Street's average price target is $25.25 (from 6 analysts). Our estimate is 38% 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