SFD
Smithfield Foods, Inc.
$26.34
Stable Earnings Power
80%
P/Adj-EPS × Normalized Multiple
Mild
·
Conviction
Fair Value
Trading 4.6% below fair value
You pay
$26.34
Bear
$22.08
Fair
$27.60
Bull
$33.12
Bear
$22.08
-16.2%
$2.76 × 8x P/E
Fair
$27.60
+4.8%
$2.76 × 10x P/E
Bull
$33.12
+25.7%
$2.76 × 12x P/E
Key Value Driver
Normalized P/E multiple (10x base case)
Implied Market Multiple
9.5x
Summary
Applying a 10x P/E to adjusted EPS of $2.76, the base-case value is $27.60 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