PBA
Pembina Pipeline Corporation
$47.53
Stable Earnings Power
80%
P/Adj-EPS × Normalized Multiple
Strong
·
Conviction
Overvalued
Trading 66.7% above fair value
You pay
$47.53
Bear
$22.82
Fair
$28.52
Bull
$34.22
Bear
$22.82
-52.0%
$1.90 × 12x P/E
Fair
$28.52
-40.0%
$1.90 × 15x P/E
Bull
$34.22
-28.0%
$1.90 × 18x P/E
Adjust Assumptions
15.0x
1.9$
Key Value Driver
Normalized P/E multiple (15x base case)
Implied Market Multiple
25.0x
Analyst Consensus (External Reference)
Never blended into the bear/base/bull estimates above.
Average Target (16 analysts)
$68.00
Divergence from AlphaVal
58%
Summary
Applying a 15x P/E to adjusted EPS of $1.90, the base-case value is $28.52 per share.
Warnings
The company pays out 110% of its profits as dividends. That leaves little cushion — the dividend could be cut if business slows down.
Wall Street's average price target is $68.00 (from 16 analysts). Our estimate is 58% below the consensus -- consider that gap carefully.
Financial statements were converted from CAD into USD using USDCAD at 0.7148 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