WTRG
Essential Utilities, Inc.
$42.76
Stable Earnings Power
85%
P/Adj-EPS × Normalized Multiple
Mild
·
Conviction
Overvalued
Trading 2.3% above fair value
You pay
$42.76
Bear
$36.59
Fair
$41.81
Bull
$47.04
Bear
$36.59
-14.4%
$2.20 × 17x P/E
Fair
$41.81
-2.2%
$2.20 × 19x P/E
Bull
$47.04
+10.0%
$2.20 × 21x P/E
Adjust Assumptions
19.0x
2.2$
Key Value Driver
Normalized P/E multiple (19x base case)
Implied Market Multiple
19.4x
Analyst Consensus (External Reference)
Never blended into the bear/base/bull estimates above.
Average Target (18 analysts)
$44.50
Divergence from AlphaVal
6%
Summary
Applying a 19x P/E to adjusted EPS of $2.20, the base-case value is $41.81 per share. DDM cross-check: $46.71.
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