SHC
Sotera Health Company
$17.35
Stable Earnings Power
80%
P/Adj-EPS × Normalized Multiple
Strong
·
Conviction
Overvalued
Trading 125.9% above fair value
You pay
$17.35
Bear
$6.14
Fair
$7.68
Bull
$9.22
Bear
$6.14
-64.6%
$0.32 × 12x P/E
Fair
$7.68
-55.7%
$0.32 × 15x P/E
Bull
$9.22
-46.9%
$0.32 × 18x P/E
Key Value Driver
Normalized P/E multiple (15x base case)
Implied Market Multiple
53.6x
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 $19.00 from 12 analysts, using a 20% weight on analyst consensus. That produces an estimated intrinsic value of $7.68 per share.
Warnings
Wall Street's average price target is $19.00 (from 12 analysts). Our estimate is 74% 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