MGEE
MGE Energy, Inc.
$80.50
Stable Earnings Power
85%
P/Adj-EPS × Normalized Multiple
Moderate
·
Conviction
Overvalued
Trading 35.2% above fair value
You pay
$80.50
Bear
$52.08
Fair
$59.52
Bull
$66.96
Bear
$52.08
-35.3%
$3.72 × 14x P/E
Fair
$59.52
-26.1%
$3.72 × 16x P/E
Bull
$66.96
-16.8%
$3.72 × 18x P/E
Key Value Driver
Normalized P/E multiple (16x base case)
Implied Market Multiple
21.6x
Summary
Applying a 16x P/E to adjusted EPS of $3.72, the base-case value is $59.52 per share. DDM cross-check: $51.86.
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