TXNM
TXNM Energy, Inc.
$57.09
Stable Earnings Power
85%
P/Adj-EPS × Normalized Multiple
Strong
·
Conviction
Overvalued
Trading 81.8% above fair value
You pay
$57.09
Bear
$27.47
Fair
$31.40
Bull
$35.32
Bear
$27.47
-51.9%
$1.62 × 14x P/E
Fair
$31.40
-45.0%
$1.62 × 16x P/E
Bull
$35.32
-38.1%
$1.62 × 18x P/E
Key Value Driver
Normalized P/E multiple (16x base case)
Implied Market Multiple
35.2x
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 $53.31 from 7 analysts, using a 20% weight on analyst consensus. That produces an estimated intrinsic value of $31.40 per share.
Warnings
The company pays out 102% of its profits as dividends. That leaves little cushion — the dividend could be cut if business slows down.
Dividend-based valuation: $42.23 (above our primary estimate by 63%). Large gaps may signal the dividend doesn't reflect full earning power.
Wall Street's average price target is $53.31 (from 7 analysts). Our estimate is 51% below 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