WAT
Waters Corporation
$383.90
Stable Earnings Power
80%
P/Adj-EPS × Normalized Multiple
Strong
·
Conviction
Overvalued
Trading 58.9% above fair value
You pay
$383.90
Bear
$193.28
Fair
$241.59
Bull
$289.91
Bear
$193.28
-49.7%
$11.49 × 12x P/E
Fair
$241.59
-37.1%
$11.49 × 15x P/E
Bull
$289.91
-24.5%
$11.49 × 18x P/E
Key Value Driver
Normalized P/E multiple (15x base case)
Implied Market Multiple
33.4x
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 $403.20 from 35 analysts, using a 30% weight on analyst consensus. That produces an estimated intrinsic value of $241.59 per share.
Warnings
Wall Street's average price target is $403.20 (from 35 analysts). Our estimate is 57% 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