T
AT&T Inc.
$22.76
Stable Earnings Power
65%
P/Adj-EPS × Normalized Multiple
Strong
·
Conviction
Undervalued
Trading 44.4% below fair value
You pay
$22.76
Bear
$32.74
Fair
$40.92
Bull
$49.10
Bear
$32.74
+43.8%
$3.11 × 12x P/E
Fair
$40.92
+79.8%
$3.11 × 15x P/E
Bull
$49.10
+115.7%
$3.11 × 18x P/E
Key Value Driver
Normalized P/E multiple (15x base case)
Implied Market Multiple
7.3x
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 $29.35 from 62 analysts, using a 35% weight on analyst consensus. That produces an estimated intrinsic value of $40.92 per share.
Warnings
Wall Street's average price target is $29.35 (from 62 analysts). Our estimate is 61% above 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