SFD
Smithfield Foods, Inc.
$20.26
Stable Earnings Power
80%
P/Adj-EPS × Normalized Multiple
Strong
·
Conviction
Undervalued
Trading 52.5% below fair value
You pay
$20.26
Bear
$35.14
Fair
$42.67
Bull
$50.20
Bear
$35.14
+73.4%
$2.51 × 14x P/E
Fair
$42.67
+110.6%
$2.51 × 17x P/E
Bull
$50.20
+147.8%
$2.51 × 20x P/E
Adjust Assumptions
17.0x
2.51$
Key Value Driver
Normalized P/E multiple (17x base case)
Implied Market Multiple
8.1x
Summary
Applying a 17x P/E to adjusted EPS of $2.51, the base-case value is $42.67 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