PNM
PNM Resources, Inc.
$41.77
Stable Earnings Power
85%
P/Adj-EPS × Normalized Multiple
Strong
·
Conviction
Overvalued
Trading 56.3% above fair value
You pay
$41.77
Bear
$23.38
Fair
$26.72
Bull
$30.06
Bear
$23.38
-44.0%
$1.67 × 14x P/E
Fair
$26.72
-36.0%
$1.67 × 16x P/E
Bull
$30.06
-28.0%
$1.67 × 18x P/E
Key Value Driver
Normalized P/E multiple (16x base case)
Implied Market Multiple
25.0x
Summary
Applying a 16x P/E to adjusted EPS of $1.67, the base-case value is $26.72 per share.
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