WES
Western Midstream Partners, LP
$46.01
Stable Earnings Power
80%
P/Adj-EPS × Normalized Multiple
Mild
·
Conviction
Fair Value
Trading 8.6% below fair value
You pay
$46.01
Bear
$40.25
Fair
$50.31
Bull
$60.38
Bear
$40.25
-12.5%
$3.23 × 13x P/E
Fair
$50.31
+9.4%
$3.23 × 16x P/E
Bull
$60.38
+31.2%
$3.23 × 19x P/E
Key Value Driver
Normalized P/E multiple (16x base case)
Implied Market Multiple
14.2x
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 $44.00 from 13 analysts, using a 20% weight on analyst consensus. That produces an estimated intrinsic value of $50.31 per share.
Warnings
The company pays out 122% 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