T-PA
AT&T Inc.
$18.17
Stable Earnings Power
65%
P/Adj-EPS × Normalized Multiple
Strong
·
Conviction
Undervalued
Trading 61.5% below fair value
You pay
$18.17
Bear
$37.71
Fair
$47.13
Bull
$56.56
Bear
$37.71
+107.5%
$3.10 × 12x P/E
Fair
$47.13
+159.4%
$3.10 × 15x P/E
Bull
$56.56
+211.3%
$3.10 × 18x P/E
Key Value Driver
Normalized P/E multiple (15x base case)
Implied Market Multiple
5.9x
Summary
Applying a 15x P/E to adjusted EPS of $3.10, the base-case value is $47.13 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