PPL
PPL Corporation
$35.41
Stable Earnings Power
85%
P/Adj-EPS × Normalized Multiple
Moderate
·
Conviction
Overvalued
Trading 18.8% above fair value
You pay
$35.41
Bear
$26.09
Fair
$29.81
Bull
$33.54
Bear
$26.09
-26.3%
$1.62 × 14x P/E
Fair
$29.81
-15.8%
$1.62 × 16x P/E
Bull
$33.54
-5.3%
$1.62 × 18x P/E
Key Value Driver
Normalized P/E multiple (16x base case)
Implied Market Multiple
21.8x
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 $41.25 from 29 analysts, using a 25% weight on analyst consensus. That produces an estimated intrinsic value of $29.81 per share.
Warnings
Wall Street's average price target is $41.25 (from 29 analysts). Our estimate is 37% below 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