CHESAPEAKE UTILITIES CORP (CPK): what the price requires

The current priced-in claim for CHESAPEAKE UTILITIES CORP (CPK) is temporarily suppressed because the live engine record is unavailable. The dated report remains a snapshot, not a current market read.

Generated: 2026-07-19 · Source: https://boothcheck.com/report/CPK

Headline

FieldValue
TickerCPK
CompanyCHESAPEAKE UTILITIES CORP
Current price$133.21/sh
CompositionEnergy distribution 68% / Energy transmission 21% / Energy generation (Eight Flags) 2% / Propane distribution operations 18% / CNG / RNG Services 3% / Other and eliminations -13%

What The Price Requires (Inversion)

The assumption today's price embeds, recovered by inverting the valuation.

FieldValue
Inversion basiswhole-company
Operating margin today27.5%
Multiple paid18x operating income

The price sits below what even a 5%/yr operating-profit decline would warrant; the inversion reports a bound, not a solved growth path.

Solve inputs: computed at a 6.6% cost of capital with 4% terminal growth over a 5-year stage.

Reconcile: at the x-ray's 9.3% required return this reads ~13.3%/yr; the models below use their own rates.

How unusual the bet is: within-range

ReferenceValue
vs own history-1.65σ
cohort percentile (of 72 peers)32
implied end-window share0%

Valuation X-Ray

The price is justified by relative-multiple and growth-DCF; asset-based/earnings-power land below the price.

How the valuation models price the stock relative to the market price. Price/FV above 1.0 means the market pays more than that lens defends (expensive); at or below 1.0 the lens can defend the price.

FamilyMedian price/FVModelsReads
Asset2.02x5expensive
Earnings1.98x3expensive
Relative1.08x5expensive
Growth0.79x2justifies

Families that justify the price: Relative, Growth Families that call it expensive: Asset, Earnings

The models below discount at their own flat-beta convention rates (cost of equity 9.3%, WACC 6.3%); the inversion above states its own rate.

Per-Model Detail (n=15)

ModelFamilyFVPrice/FVApplicableMethodology
DCF Perpetual GrowthGrowth——no—
DCF Exit MultipleGrowth$221.560.60xyesExit EV/EBITDA: 11.7x / 13.7x / 15.7x (bear / base = today's held flat / bull), 6yr
Relative ValuationRelative$133.781.00xyesP/E 20x (static sector reference · 2026-04), scenarios: 16.3x / 20.0x / 23.7x (bear / base = reference held flat / bull), EV/EBITDA 13x
Simple DDMGrowth——no—
Two-Stage DDMGrowth——no—
Simple Excess ReturnAsset$66.831.99xyesBV/sh $68.67, ROE (TTM) 9.0%, ke 9.3%
Two-Stage Excess ReturnAsset$65.942.02xyes5yr excess ROE then converge to ke=9.3%
Discounted Future Market CapGrowth$137.260.97xyesRev $1.0B, growth 17% (input: historical growth; tapered), Terminal P/S: 2.7x / 3.3x / 3.9x (bear / base = today's held flat / bull, cap 12x)
Peter Lynch Fair ValueRelative$96.621.38xyesEPS $6.23, growth 16% (input: historical EPS growth), PEG=1.39 (Fair)
Margin TrajectoryGrowth——no—
Earnings Power ValueEarnings$28.424.69xyesNormalized EBIT (5y avg op income, one-time charges added back) $0.19B × (1−21%) / WACC 6.3% → EPV (no growth)
Residual IncomeAsset$65.792.02xyesBV $68.67 + 5yr PV of (ROE (TTM) 9.0% − Kₑ 9.3%) × BV; BV grows 5.9%/yr
Graham NumberAsset$98.111.36xyes√(22.5 × EPS $6.23 × BVPS $68.67) — Graham's conservative floor
EV/EBITDA RelativeRelative$123.361.08xyesEBITDA $0.36B × sector EV/EBITDA 13.0x
FCF YieldEarnings——no—
SBC-Adj FCF YieldEarnings——no—
Ben Graham FormulaEarnings$201.020.66xyesEPS $6.23 × (8.5 + 2×15.0%) × (4.4 / 5.3%)
ROIC-Justified P/BAsset$25.385.25xyesBV $68.67 × (ROIC 2.3% / WACC 6.3%)
P/Sales SectorRelative$102.321.30xyesRevenue $0.98B × sector P/S 2.5x
PEG Fair ValueRelative$144.940.92xyesEPS $6.23 × (PEG 1.5 × growth 15.5% (input: historical EPS growth)) → PE 23.3x
Earnings YieldEarnings$67.351.98xyesEPS $6.23 / required return 9.3% (Rf 4.3% + ERP 5.0%)
Funds From Operations MultipleRelative——no—
Clinical Phase NPVGrowth——no—
MertonAsset——no—
V5 Mechanical———no—

Solvency

FieldValue
Net debt$1.7b
Net debt / NOPAT (after-tax)7.62x
Net debt / operating income (pre-tax)6.02x
Interest coverage3.9x
Share count CAGR (dilution)7.9%
Burning cashno

Bullet Takeaways

Bull Case

The counterintuitive finding in the data is the growth rate. Utilities are supposed to be slow, bond-like compounders, but Chesapeake Utilities grew Q1 2026 EPS 11.8% to $2.47 from $2.21, and management has reaffirmed an 8% long-term EPS CAGR target with 2028 EPS guidance of $7.75 to $8.00. That is a growth rate most regulated utilities cannot approach, and it is the single fact that does not fit the sleepy-utility narrative. The engine is rate-base expansion: the company is investing heavily in regulated infrastructure, and every approved dollar of capital earns a regulated return that flows into earnings.

The mechanism is durable and visible. Adjusted gross margin grew $23.8 million in Q1 2026, driven by regulatory initiatives, infrastructure programs, and natural gas organic growth. The 10-K describes the source plainly, noting "additional adjusted gross margin of $7.4 million from natural gas customer growth" (accession 0001628280-26-011753). Customer growth in the company's territories, especially Florida, is a structural tailwind: people and businesses keep moving in, and each new connection adds regulated load. The capital plan, $450M to $500M in 2026 and $1.5B to $1.8B through 2028, gives multi-year visibility into the rate-base growth that powers the EPS target.

The valuation does not demand much. At $120.81 the market is paying about 17x company-wide operating income, which inverts to roughly negative 4% implied operating growth, a low bar for a business compounding EPS at a high-single-digit pace. The relative-multiple lens near $134, the discounted-future-market-cap method near $124, and EV/EBITDA-relative near $123 all sit near or above the price. The dividend grows alongside earnings. The bull case is a regulated compounder hiding in plain sight: utility-grade predictability with a growth rate that most peers cannot match, priced as if it will barely grow at all.

Bear Case

The sector-cycle concern for a capital-intensive utility is not demand cyclicality but the regulatory and rate environment that determines whether all that capital earns its keep. Chesapeake's growth depends entirely on regulators approving rate increases that let it recover and earn a return on its investments. Florida City Gas filed a general rate-base increase petition in April 2026, and the outcome sits with the Florida Public Service Commission. If regulators grant less than requested, or impose lower allowed returns, the 8% EPS CAGR target loses its foundation. The whole model assumes a cooperative regulatory cycle, and that is precisely the external variable management does not control.

The capital plan that drives growth also drives risk. Funding $1.5B to $1.8B of investment through 2028 requires debt and equity, and the company already carries net debt near $1.7B against trailing operating income near $268M, leverage above 6x with interest coverage at just 3.7x. Rising rates make that debt more expensive and make the regulated returns less attractive relative to risk-free yields, the classic headwind for utility valuations. The share count has been growing, near 8% on a recent basis, which means equity issuance to fund the capital plan is diluting existing holders. WRU project delays already trimmed about $0.10 from 2026 EPS, a reminder that large capital programs slip.

The valuation is not cheap on the conservative methods. Earnings Power Value near $31 and the ROIC-justified book value near $26 sit far below the $120.81 price, and the asset-based methods cluster in the mid-$60s, because the current returns on the growing capital base are modest relative to the cost of equity. The price is justified only by the relative-multiple and growth lenses, which means it is paying for the rate-base growth to continue uninterrupted. The bet against Chesapeake is that the regulatory cycle turns less favorable, that rising rates compress the multiple a utility can command, and that the capital plan dilutes and levers the company faster than approved returns reward it.

Valuation

At $120.81, inverting the price puts Chesapeake at roughly 17x company-wide operating income, which solves to about negative 4% annual operating growth over a five-year stage at a 7% cost of capital. That implied rate is comfortably within what the company has recently delivered, so the priced-in assumption reads as within range; the market is not demanding aggressive growth despite the company's own high-single-digit EPS target.

The model families split along the line typical of a regulated growth utility. The relative-multiple lens near $134, the discounted-future-market-cap method near $124, and EV/EBITDA-relative near $123 cluster near the price. The asset-based methods are lower, with simple excess return near $67 and residual income near $66, because the regulated returns on the growing capital base run close to the cost of equity rather than well above it. Earnings Power Value near $31 is the most cautious, reflecting normalized EBIT with no growth credit. The blended X-ray near $97 sits below the price, pulled down by the asset and earnings-power figures.

The valuation conclusion is that the price rests on the relative-multiple and growth methods, which is appropriate for a utility whose value is its rate-base growth rather than its current returns. If the 8% EPS CAGR and the capital plan execute with supportive regulation, the price is reasonable for the visibility it offers. If rates rise or regulators tighten, the conservative methods near $31 to $67 become a reminder of how much of the price is growth-dependent. The deciding variable is the regulatory environment and the cost of capital, the two levers that decide whether the investment program creates value.

Catalysts

The Florida City Gas rate case is the most important near-term catalyst. The April 2026 petition for a general rate-base increase, now before the Florida Public Service Commission, will determine the allowed return on a meaningful chunk of the capital base. A constructive outcome supports the EPS trajectory; an unfavorable one undercuts it.

The capital plan and EPS guidance frame the multi-year story. Management reaffirmed 2028 EPS guidance of $7.75 to $8.00 and an 8% long-term CAGR, backed by $450M to $500M of 2026 capex and $1.5B to $1.8B through 2028. The next earnings reports test whether rate-base growth keeps translating into double-digit EPS gains, after Q1 2026 EPS rose 11.8% to $2.47. Watch for any further project delays like the WRU slippage that trimmed about $0.10 from 2026.

Customer growth and gross margin are the operating reads. Adjusted gross margin grew $23.8 million in Q1 2026 on natural gas customer growth and infrastructure programs, so continued customer additions, especially in Florida, are the cleanest signal the organic engine is intact. The main external variables are interest rates, which affect both financing cost and the utility's relative valuation, and the pace of equity issuance needed to fund the capital plan.

Sources: Chesapeake Utilities Q1 2026 results (StockTitan), Chesapeake Utilities Q1 2026 analysis (Kavout), Chesapeake Utilities investor summary (Quartr)

Peer Cohorts (Per Segment, With Filing Citations)

Regulated Energy (reported)

Unregulated Energy (reported)

Methodology Note

Fundamentals sourced from SEC EDGAR filings. Current price from Databento. The priced-in inversion and valuation x-ray are computed by the boothcheck engine; narrative composed by AI from the structured data.

View the full interactive CPK report on boothcheck