Is Enterprise Products Partners LP (EPD) overvalued?
On Equity Rank's model estimate, EPD trades 13% above its fair value. Enterprise Products Partners LP (EPD) last closed at $37.03; the multi-method model fair value is $32.81.
| Price | Model fair value | Price vs model |
|---|---|---|
| $37.03 | $32.81 | 13% above |
What the answer rests on
- 5 of 13 valuation methods put EPD's value above its price and 8 put it below, so the methods disagree.
- To justify today's price, EPD's free cash flow would need to grow about 5.1% a year for ten years (a reverse discounted cash flow). Over the last three years it actually grew -21.3% a year.
- EPD trades at 12.2 times its last year's earnings, against a median of 14.9 for 110 profitable Energy companies.
- Over the past year the price sat below the model fair value on 1% of trading days. The gap ranged from 1% below to 79% above the model fair value.
Read this before relying on it
The model fair value is an estimate from published financial statements. It is not a forecast of where the price goes, and it can be wrong. Within 10% either side we call it close to fair value: valuation models are not precise enough to read more into a smaller gap. Our own lists have no proven edge over the market yet; the live record shows every result, misses included.
Every valuation method behind EPD's fair value · What prices assume · Other companies