WTRG
Essential Utilities, Inc.
$40.71
Stable Earnings Power
85%
P/Adj-EPS × Normalized Multiple
Mild
·
Conviction
Fair Value
Trading 3.4% below fair value
You pay
$40.71
Bear
$36.86
Fair
$42.12
Bull
$47.39
Bear
$36.86
-9.5%
$2.20 × 17x P/E
Fair
$42.12
+3.5%
$2.20 × 19x P/E
Bull
$47.39
+16.4%
$2.20 × 21x P/E
Key Value Driver
Normalized P/E multiple (19x base case)
Implied Market Multiple
18.5x
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 $43.00 from 18 analysts, using a 25% weight on analyst consensus. That produces an estimated intrinsic value of $42.12 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