WTRG
Essential Utilities, Inc.
$37.44
Stable Earnings Power
85%
P/Adj-EPS × Normalized Multiple
Mild
·
Conviction
Fair Value
Trading 9.7% below fair value
You pay
$37.44
Bear
$36.27
Fair
$41.45
Bull
$46.64
Bear
$36.27
-3.1%
$2.20 × 17x P/E
Fair
$41.45
+10.7%
$2.20 × 19x P/E
Bull
$46.64
+24.6%
$2.20 × 21x P/E
Key Value Driver
Normalized P/E multiple (19x base case)
Implied Market Multiple
17.0x
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 $40.33 from 18 analysts, using a 25% weight on analyst consensus. That produces an estimated intrinsic value of $41.45 per share.
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