TR
Tootsie Roll Industries, Inc.
$40.06
Stable Earnings Power
80%
P/Adj-EPS × Normalized Multiple
Strong
·
Conviction
Overvalued
Trading 44.2% above fair value
You pay
$40.06
Bear
$22.88
Fair
$27.79
Bull
$32.69
Bear
$22.88
-42.9%
$1.54 × 15x P/E
Fair
$27.79
-30.6%
$1.54 × 18x P/E
Bull
$32.69
-18.4%
$1.54 × 21x P/E
Key Value Driver
Normalized P/E multiple (18x base case)
Implied Market Multiple
26.0x
Summary
Applying a 18x P/E to adjusted EPS of $1.54, the base-case value is $27.79 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