RYAM
Rayonier Advanced Materials Inc.
$8.73
Stable Earnings Power
40%
P/Adj-EPS × Normalized Multiple
Strong
·
Conviction
Undervalued
Trading 57.2% below fair value
You pay
$8.73
Bear
$16.32
Fair
$20.40
Bull
$24.48
Bear
$16.32
+86.9%
$1.55 × 12x P/E
Fair
$20.40
+133.7%
$1.55 × 15x P/E
Bull
$24.48
+180.4%
$1.55 × 18x P/E
Key Value Driver
Normalized P/E multiple (15x base case)
Implied Market Multiple
5.6x
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 $9.00 from 9 analysts, using a 20% weight on analyst consensus. That produces an estimated intrinsic value of $20.40 per share.
Warnings
Wall Street's average price target is $9.00 (from 9 analysts). Our estimate is 158% above 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