I have always found analysts reports of fair value not helpful. They rarely get it right, and they continue to spruick stocks when the fundamentals are all pointing down. What drives the fair value is their assumptions. They need to be critiqued with a fine tooth comb, and then if you agree with the assumptions, the DCF number probably needs to be increased to allow for a greater margin of risk.
Putting all that aside, I agree with Madrum, WPL need to get NEBT debt down. This derisks the company from any shocks and provides it with the resources to be "greedy when others are fearful". Certainly PC appears to be adopting this strategy.
Some reports are talking about WPL returning cash to shareholders if an acquisition is not forthcoming. Interpret that as an off market share buyback to use some of the excess franking credits. (Make sure your SMSF is prepared)
HT1
WPL Price at posting:
$33.09 Sentiment: Buy Disclosure: Held
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