MSEX
Middlesex Water Company
$53.80
Stable Earnings Power
85%
P/Adj-EPS × Normalized Multiple
Strong
·
Conviction
Overvalued
Trading 42.5% above fair value
You pay
$53.80
Bear
$33.04
Fair
$37.76
Bull
$42.48
Bear
$33.04
-38.6%
$2.36 × 14x P/E
Fair
$37.76
-29.8%
$2.36 × 16x P/E
Bull
$42.48
-21.0%
$2.36 × 18x P/E
Adjust Assumptions
16.0x
2.36$
Key Value Driver
Normalized P/E multiple (16x base case)
Implied Market Multiple
22.8x
Summary
Applying a 16x P/E to adjusted EPS of $2.36, the base-case value is $37.76 per share. DDM cross-check: $41.99.
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