PBA
Pembina Pipeline Corporation
$49.58
Stable Earnings Power
80%
P/Adj-EPS × Normalized Multiple
Moderate
·
Conviction
Overvalued
Trading 29.9% above fair value
You pay
$49.58
Bear
$30.55
Fair
$38.17
Bull
$45.81
Bear
$30.55
-38.4%
$2.53 × 12x P/E
Fair
$38.17
-23.0%
$2.53 × 15x P/E
Bull
$45.81
-7.6%
$2.53 × 18x P/E
Key Value Driver
Normalized P/E multiple (15x base case)
Implied Market Multiple
19.6x
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 $38.76 from 16 analysts, using a 25% weight on analyst consensus. That produces an estimated intrinsic value of $38.17 per share.
Warnings
The company's reported profits differ from official accounting profits by 32%. Check what costs are being left out of the adjusted number.
The company pays out 108% of its profits as dividends. That leaves little cushion — the dividend could be cut if business slows down.
Financial statements were converted from CAD into USD using USDCAD at 0.7239 USD per CAD.
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