TK
Teekay Corporation
$13.34
Stable Earnings Power
80%
P/Adj-EPS × Normalized Multiple
Moderate
·
Conviction
Fair Value
Trading 22.0% below fair value
You pay
$13.34
Bear
$13.68
Fair
$17.10
Bull
$20.52
Bear
$13.68
+2.6%
$1.14 × 12x P/E
Fair
$17.10
+28.2%
$1.14 × 15x P/E
Bull
$20.52
+53.8%
$1.14 × 18x P/E
Key Value Driver
Normalized P/E multiple (15x base case)
Implied Market Multiple
11.7x
Summary
Applying a 15x P/E to adjusted EPS of $1.14, the base-case value is $17.10 per share.
Warnings
The company pays out 461% of its profits as dividends. That leaves little cushion — the dividend could be cut if business slows down.
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