Raised 2026 earnings and a 4 percent fourth quarter still imply about $9.70 of 2027 profit. At eighteen times that is a $175 stock, a market-like return from $171 including the dividend.
Key points
- $9.10, $9.15 is 2026 adjusted EPS guidance after the company recast amortization.
- 3.3% adjusted organic growth in the September quarter; management expects just over 4% in the fourth.
- $171.12 pays about 18.8 times this year’s midpoint and 17.6 times my $9.70 of 2027 earnings.
The call
The price needs 2027 earnings near $9.50 at eighteen times, or a higher multiple if profit stalls. That is a fully valued industrial, not a cheap turnaround.
Quarterly sales and my fourth-quarter estimate ($ billions)- Reported sales
- My Q4 estimate
SEC 10-Q filings through Q3 2026; Q4 2026E is the author's estimate.
I model about $9.70 of 2027 adjusted earnings on 4% organic growth, a 25.4% operating margin, and continued buybacks. Eighteen times that is $175. The Amazon warrant is not contracted revenue; EBO is still tens of millions.
Valuation
| Item | Figure |
|---|
| 2026 adj. EPS (company) | $9.12 midpoint |
| 2027 adj. EPS (mine) | $9.70 |
| Multiple | 18 times |
| 12-month target | $175 |
| Dividend, last 12 months | $3.07 a share |
| Implied total return from $171.12 | about 4% |
Eighteen times is a normal multiple for a 4% grower with residual PFAS cash outflows. Upside is a higher multiple if EBO scales; downside is a new legal accrual. That is a market-like payoff, so the rating is hold.
Adjusted EPS: reported path, my 2027, what $171 requires- Adjusted EPS
- My 2027 estimate
Company adjusted EPS (new amortization basis) and author's 2027 estimate. Price line is $171.12 at 18 times.
Risks
- AFFF personal-injury mediation could produce a cash settlement larger than the $7.5 billion PFAS environmental reserve.
- Consumer electronics and auto remain mid-teens and mid-single-digit declines; they can offset industrial gains.
- Adjusted free cash flow adds back nearly $900 million of after-tax litigation payments this quarter; GAAP cash conversion can disappoint.
What would change my mind
A 2027 framework in January that puts adjusted EPS clearly above $10.20, or a disclosed AFFF settlement that is cash-heavy.