OTTR
Otter Tail Corporation
$87.35
Stable Earnings Power
85%
P/Adj-EPS × Normalized Multiple
Mild
·
Conviction
Fair Value
Trading 12.8% below fair value
You pay
$87.35
Bear
$87.64
Fair
$100.16
Bull
$112.68
Bear
$87.64
+0.3%
$6.56 × 14x P/E
Fair
$100.16
+14.7%
$6.56 × 16x P/E
Bull
$112.68
+29.0%
$6.56 × 18x P/E
Key Value Driver
Normalized P/E multiple (16x base case)
Implied Market Multiple
13.3x
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 $81.00 from 7 analysts, using a 20% weight on analyst consensus. That produces an estimated intrinsic value of $100.16 per share.
Warnings
Dividend-based valuation: $163.72 (above our primary estimate by 56%). Large gaps may signal the dividend doesn't reflect full earning power.
Wall Street's average price target is $81.00 (from 7 analysts). Our estimate is 30% above 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