PPL
PPL Corporation
$34.58
Stable Earnings Power
85%
P/Adj-EPS × Normalized Multiple
Moderate
·
Conviction
Overvalued
Trading 35.9% above fair value
You pay
$34.58
Bear
$22.26
Fair
$25.44
Bull
$28.62
Bear
$22.26
-35.6%
$1.59 × 14x P/E
Fair
$25.44
-26.4%
$1.59 × 16x P/E
Bull
$28.62
-17.2%
$1.59 × 18x P/E
Adjust Assumptions
16.0x
1.59$
Key Value Driver
Normalized P/E multiple (16x base case)
Implied Market Multiple
21.7x
Analyst Consensus (External Reference)
Never blended into the bear/base/bull estimates above.
Average Target (29 analysts)
$39.36
Divergence from AlphaVal
35%
Summary
Applying a 16x P/E to adjusted EPS of $1.59, the base-case value is $25.44 per share. DDM cross-check: $16.64.
Warnings
Dividend-based valuation: $16.64 (below our primary estimate by 35%). Large gaps may signal the dividend doesn't reflect full earning power.
Wall Street's average price target is $39.36 (from 29 analysts). Our estimate is 35% 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