PPLC
PPL Corporation
$46.79
Stable Earnings Power
85%
P/Adj-EPS × Normalized Multiple
Strong
·
Conviction
Overvalued
Trading 83.9% above fair value
You pay
$46.79
Bear
$22.26
Fair
$25.44
Bull
$28.62
Bear
$22.26
-52.4%
$1.59 × 14x P/E
Fair
$25.44
-45.6%
$1.59 × 16x P/E
Bull
$28.62
-38.8%
$1.59 × 18x P/E
Adjust Assumptions
16.0x
1.59$
Key Value Driver
Normalized P/E multiple (16x base case)
Implied Market Multiple
29.4x
Summary
Applying a 16x P/E to adjusted EPS of $1.59, the base-case value is $25.44 per share.
Warnings
The company pays out 158% of its profits as dividends. That leaves little cushion — the dividend could be cut if business slows down.
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