SWX
Southwest Gas Holdings, Inc.
$92.38
Stable Earnings Power
85%
P/Adj-EPS × Normalized Multiple
Mild
·
Conviction
Fair Value
Trading 5.8% below fair value
You pay
$92.38
Bear
$85.77
Fair
$98.02
Bull
$110.28
Bear
$85.77
-7.2%
$6.08 × 14x P/E
Fair
$98.02
+6.1%
$6.08 × 16x P/E
Bull
$110.28
+19.4%
$6.08 × 18x P/E
Key Value Driver
Normalized P/E multiple (16x base case)
Implied Market Multiple
15.2x
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 $101.00 from 14 analysts, using a 20% weight on analyst consensus. That produces an estimated intrinsic value of $98.02 per share.
Warnings
Dividend-based valuation: $36.14 (below our primary estimate by 63%). Large gaps may signal the dividend doesn't reflect full earning power.
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