TXNM
TXNM Energy, Inc.
$58.55
Stable Earnings Power
85%
P/Adj-EPS × Normalized Multiple
Strong
·
Conviction
Overvalued
Trading 85.8% above fair value
You pay
$58.55
Bear
$27.58
Fair
$31.52
Bull
$35.46
Bear
$27.58
-52.9%
$1.97 × 14x P/E
Fair
$31.52
-46.2%
$1.97 × 16x P/E
Bull
$35.46
-39.4%
$1.97 × 18x P/E
Adjust Assumptions
16.0x
1.97$
Key Value Driver
Normalized P/E multiple (16x base case)
Implied Market Multiple
29.7x
Analyst Consensus (External Reference)
Never blended into the bear/base/bull estimates above.
Average Target (7 analysts)
$53.31
Divergence from AlphaVal
41%
Summary
Applying a 16x P/E to adjusted EPS of $1.97, the base-case value is $31.52 per share. DDM cross-check: $40.65.
Warnings
The company's reported profits differ from official accounting profits by 33%. Check what costs are being left out of the adjusted number.
The company pays out 114% of its profits as dividends. That leaves little cushion — the dividend could be cut if business slows down.
Dividend-based valuation: $40.65 (above our primary estimate by 29%). 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 41% 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