WTRG
Essential Utilities, Inc.
$41.07
Stable Earnings Power
85%
P/Adj-EPS × Normalized Multiple
Mild
·
Conviction
Fair Value
Trading 1.8% below fair value
You pay
$41.07
Bear
$36.59
Fair
$41.81
Bull
$47.04
Bear
$36.59
-10.9%
$2.20 × 17x P/E
Fair
$41.81
+1.8%
$2.20 × 19x P/E
Bull
$47.04
+14.5%
$2.20 × 21x P/E
Adjust Assumptions
19.0x
2.2$
Key Value Driver
Normalized P/E multiple (19x base case)
Implied Market Multiple
18.7x
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: $47.54.
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