PBT
Permian Basin Royalty Trust
$33.62
Stable Earnings Power
80%
P/Adj-EPS × Normalized Multiple
Strong
·
Conviction
Overvalued
Trading 307.5% above fair value
You pay
$33.62
Bear
$6.60
Fair
$8.25
Bull
$9.90
Bear
$6.60
-80.4%
$0.55 × 12x P/E
Fair
$8.25
-75.5%
$0.55 × 15x P/E
Bull
$9.90
-70.6%
$0.55 × 18x P/E
Adjust Assumptions
15.0x
0.55$
Key Value Driver
Normalized P/E multiple (15x base case)
Implied Market Multiple
61.1x
Summary
Applying a 15x P/E to adjusted EPS of $0.55, the base-case value is $8.25 per share. DDM cross-check: $34.02.
Warnings
The company's reported profits differ from official accounting profits by 77%. Check what costs are being left out of the adjusted number.
Dividend-based valuation: $34.02 (above our primary estimate by 312%). Large gaps may signal the dividend doesn't reflect full earning power.
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