SCI
Service Corporation International
$76.91
Stable Earnings Power
40%
P/Adj-EPS × Normalized Multiple
Moderate
·
Conviction
Overvalued
Trading 34.9% above fair value
You pay
$76.91
Bear
$45.60
Fair
$57.00
Bull
$68.40
Bear
$45.60
-40.7%
$3.80 × 12x P/E
Fair
$57.00
-25.9%
$3.80 × 15x P/E
Bull
$68.40
-11.1%
$3.80 × 18x P/E
Adjust Assumptions
15.0x
3.8$
Key Value Driver
Normalized P/E multiple (15x base case)
Implied Market Multiple
20.2x
Analyst Consensus (External Reference)
Never blended into the bear/base/bull estimates above.
Average Target (10 analysts)
$105.00
Divergence from AlphaVal
46%
Summary
Applying a 15x P/E to adjusted EPS of $3.80, the base-case value is $57.00 per share. DDM cross-check: $248.14.
Warnings
Dividend-based valuation: $248.14 (above our primary estimate by 335%). Large gaps may signal the dividend doesn't reflect full earning power.
Wall Street's average price target is $105.00 (from 10 analysts). Our estimate is 46% 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