MGEE
MGE Energy, Inc.
$77.45
Stable Earnings Power
85%
P/Adj-EPS × Normalized Multiple
Moderate
·
Conviction
Overvalued
Trading 30.1% above fair value
You pay
$77.45
Bear
$52.08
Fair
$59.52
Bull
$66.96
Bear
$52.08
-32.8%
$3.72 × 14x P/E
Fair
$59.52
-23.2%
$3.72 × 16x P/E
Bull
$66.96
-13.5%
$3.72 × 18x P/E
Adjust Assumptions
16.0x
3.72$
Key Value Driver
Normalized P/E multiple (16x base case)
Implied Market Multiple
20.8x
Summary
Applying a 16x P/E to adjusted EPS of $3.72, the base-case value is $59.52 per share. DDM cross-check: $54.06.
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