SFD
Smithfield Foods, Inc.
$26.26
Stable Earnings Power
80%
P/Adj-EPS × Normalized Multiple
Strong
·
Conviction
Undervalued
Trading 44.0% below fair value
You pay
$26.26
Bear
$38.63
Fair
$46.91
Bull
$55.19
Bear
$38.63
+47.1%
$2.76 × 14x P/E
Fair
$46.91
+78.6%
$2.76 × 17x P/E
Bull
$55.19
+110.2%
$2.76 × 20x P/E
Key Value Driver
Normalized P/E multiple (17x base case)
Implied Market Multiple
9.5x
Summary
Applying a 17x P/E to adjusted EPS of $2.76, the base-case value is $46.91 per share.
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