WY
Weyerhaeuser Company
$23.91
Stable Earnings Power
40%
P/Adj-EPS × Normalized Multiple
Mild
·
Conviction
Overvalued
Trading 11.8% above fair value
You pay
$23.91
Bear
$17.10
Fair
$21.38
Bull
$25.66
Bear
$17.10
-28.5%
$1.26 × 12x P/E
Fair
$21.38
-10.6%
$1.26 × 15x P/E
Bull
$25.66
+7.3%
$1.26 × 18x P/E
Key Value Driver
Normalized P/E multiple (15x base case)
Implied Market Multiple
19.0x
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 $29.00 from 25 analysts, using a 25% weight on analyst consensus. That produces an estimated intrinsic value of $21.38 per share.
Warnings
The company's reported profits differ from official accounting profits by 179%. Check what costs are being left out of the adjusted number.
The company pays out 187% of its profits as dividends. That leaves little cushion — the dividend could be cut if business slows down.
Wall Street's average price target is $29.00 (from 25 analysts). Our estimate is 35% below the consensus -- consider that gap carefully.
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