HUBBELL INC (HUBB): what the price assumes
In the published model solve dated 2026-Q2, anchored at $459.66, HUBBELL INC (HUBB) is priced for +16.6% growth. boothcheck publishes no house fair value, target price, or buy/sell rating; individual model outputs and user-controlled scenarios are analytical inputs, not Boothcheck targets. Narrative composed 2026-06-27.
Generated: 2026-08-30 · Exported: 2026-08-31 · Source: https://boothcheck.com/report/HUBB
Headline
| Field | Value |
|---|---|
| Ticker | HUBB |
| Company | HUBBELL INC |
| Current price | $459.66/sh |
| Composition | Grid Infrastructure 47% / Grid Automation 16% / Electrical Products 15% / Industrial 22% / Retail and Builder 0% |
What The Price Assumes (Inversion)
The assumption today's price embeds, recovered by inverting the valuation.
| Field | Value |
|---|---|
| Inversion basis | whole-company |
| Operating margin (value-band context) | 13.3% |
| Operating margin today | 20.7% |
| Margin compression (value-band) | -7.4pp |
| Implied growth | 16.6% |
| Multiple paid | 21x operating income |
The operating-margin figure is value-band context at year 12: derived from the framework's value band, a separate calculation — not part of the priced-in solve.
Solve inputs: computed at a 9% cost of capital with 4% terminal growth over a 5-year stage.
How unusual the bet is: within-range (limited comparison data)
| Reference | Value |
|---|---|
| vs own history | +0.79σ |
| cohort percentile (of 188 peers) | 31 |
Valuation X-Ray
Asset, earnings-power and peer-multiple models all land far below the price; ONLY the growth-DCF reaches it. The bet is durable compounding the static frames structurally cannot price (a moat/durability premium).
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.
| Family | Median price/FV | Models | Reads |
|---|---|---|---|
| Asset | 2.48x | 5 | expensive |
| Earnings | 3.20x | 5 | expensive |
| Relative | 1.65x | 2 | expensive |
| Growth | 1.22x | 3 | expensive |
Families that justify the price: Growth Families that call it expensive: Asset, Earnings, Relative
The models below discount at their own flat-beta convention rates (cost of equity 9.3%, WACC 8.7%); the inversion above states its own rate.
Per-Model Detail (n=15)
| Model | Family | FV | Price/FV | Applicable | Methodology |
|---|---|---|---|---|---|
| DCF Perpetual Growth | Growth | $370.55 | 1.24x | yes | FCF base $0.9B, growth 7% (input: historical growth), terminal g 4.0%, WACC 8.7%, 5yr projection |
| DCF Exit Multiple | Growth | $460.85 | 1.00x | yes | Exit EV/EBITDA: 16.3x / 18.3x / 20.3x (bear / base = today's held flat / bull), 5yr |
| Relative Valuation | Relative | — | — | no | P/E 22x (static sector reference · 2026-04), scenarios: 18.4x / 22.0x / 25.6x (bear / base = reference held flat / bull), EV/EBITDA 16x |
| Simple DDM | Growth | — | — | no | — |
| Two-Stage DDM | Growth | — | — | no | — |
| Simple Excess Return | Asset | $185.30 | 2.48x | yes | BV/sh $71.32, ROE (TTM) 24.0%, ke 9.3% |
| Two-Stage Excess Return | Asset | $299.07 | 1.54x | yes | 5yr excess ROE then converge to ke=9.3% |
| Discounted Future Market Cap | Growth | $375.95 | 1.22x | yes | Rev $6.0B, growth 7% (input: historical growth; tapered), Terminal P/S: 3.4x / 4.1x / 4.7x (bear / base = today's held flat / bull, cap 8x) |
| Peter Lynch Fair Value | Relative | $232.16 | 1.98x | yes | EPS $16.93, growth 14% (input: historical EPS growth), PEG=1.96 (Overvalued) |
| Margin Trajectory | Growth | — | — | no | — |
| Earnings Power Value | Earnings | $118.05 | 3.89x | yes | Normalized EBIT (5y avg op income, one-time charges added back) $0.95B × (1−23%) / WACC 8.7% → EPV (no growth) |
| Residual Income | Asset | $271.78 | 1.69x | yes | BV $71.32 + 5yr PV of (ROE (TTM) 24.0% − Kₑ 9.3%) × BV; BV grows 8.8%/yr |
| Graham Number | Asset | $164.82 | 2.79x | yes | √(22.5 × EPS $16.93 × BVPS $71.32) — Graham's conservative floor |
| EV/EBITDA Relative | Relative | — | — | no | EBITDA $1.45B × sector EV/EBITDA 16.0x |
| FCF Yield | Earnings | $143.70 | 3.20x | yes | FCF $909.3M / Kₑ 9.3% — zero-growth perpetuity |
| SBC-Adj FCF Yield | Earnings | $136.94 | 3.36x | yes | SBC-adj FCF $0.88B (FCF $0.91B − SBC $0.03B) capitalized at Kₑ |
| Ben Graham Formula | Earnings | $509.76 | 0.90x | yes | EPS $16.93 × (8.5 + 2×13.7%) × (4.4 / 5.3%) |
| ROIC-Justified P/B | Asset | $27.86 | 16.50x | yes | BV $71.32 × (ROIC 3.4% / WACC 8.7%) |
| P/Sales Sector | Relative | — | — | no | Revenue $6.00B × sector P/S 5.0x |
| PEG Fair Value | Relative | $348.25 | 1.32x | yes | EPS $16.93 × (PEG 1.5 × growth 13.7% (input: historical EPS growth)) → PE 20.6x |
| Earnings Yield | Earnings | $183.03 | 2.51x | yes | EPS $16.93 / required return 9.3% (Rf 4.3% + ERP 5.0%) |
| Funds From Operations Multiple | Relative | — | — | no | — |
| Clinical Phase NPV | Growth | — | — | no | — |
| Merton | Asset | — | — | no | — |
| V5 Mechanical | — | — | — | no | — |
Economic-Unit Decomposition (Sum Of The Parts)
One or more material disclosed units has unresolved economics. Unknown/general is not evidence of homogeneity: segment SOTP is primary but incomplete, consolidated cash flow may remain only a secondary cross-check when every unit shares an enterprise basis, and one sector multiple or target margin is withheld.
| Unit | Role | Valuation basis | Revenue | Reported profit | Value evidence | Status |
|---|---|---|---|---|---|---|
| Utility Solutions | operating | enterprise | $3.7b | $1.3b operating-income | withheld | unresolved no unit value |
| Electrical Solutions | operating | enterprise | $2.2b | $788.1m operating-income | withheld | unresolved no unit value |
No total common-equity value is stated. One or more material units lack a supported unit value. The displayed values are an indicative subtotal; consolidated debt and cash cannot be applied to a fraction of the company.
Solvency
| Field | Value |
|---|---|
| Net debt | $2.1b |
| Net debt / NOPAT (after-tax) | 2.14x |
| Net debt / operating income (pre-tax) | 1.66x |
| Share count CAGR (buyback) | -0.5% |
| Burning cash | no |
Interest expense is not separately reported in the latest filings, so interest coverage cannot be computed.
Bullet Takeaways
- Hubbell makes the unglamorous hardware that connects and protects the electrical grid, transformers, insulators, enclosures, and grid-automation gear, and it is riding utility grid hardening and data-center power demand, with data-center sales up 40% in the first quarter.
- The biggest risk is the price: at about 26 times operating income, only the most growth-friendly method reaches it, embedding operating growth far above the 6% to 9% organic growth management guides for 2026.
- Watch grid-infrastructure and data-center momentum against full-year 2026 sales-growth guidance of 8% to 11%, and the $1.5 billion high-voltage transmission opportunity management has flagged over the next decade.
Bull Case
The earnings trajectory is the bull case, and it is accelerating in the segments that matter. First-quarter organic sales grew 8%, led by double-digit growth in the Electrical Solutions segment and in grid-infrastructure products, where core transmission-and-distribution demand remained very strong. Grid infrastructure alone grew 12% organically, and data-center sales soared 40%, strong enough that management raised the full-year data-center growth outlook to over 25%. On that momentum, Hubbell raised full-year 2026 guidance to 8% to 11% total sales growth and 6% to 9% organic growth, with double-digit adjusted operating-profit growth expected at the midpoint. Margins are moving with the volume: the company's filing shows operating margin expanding, with adjusted operating margin rising toward the low twenties.
The demand behind the numbers is structural, not cyclical. Hubbell sits directly in the path of grid hardening, renewable-energy integration, data-center expansion, and industrial electrification, four secular forces that all require more of exactly the equipment it makes. The strength is broad: the filing attributes volume growth to "Strong substation, transmission and distribution markets". When utilities upgrade aging grids and data centers scramble for power, they buy the connectors, switches, and protection gear that Hubbell has spent a century building a position in.
The moat is the combination of breadth and specification. Hubbell's products are designed into utility and industrial systems, where reliability matters more than price and switching suppliers means requalifying components, which gives it pricing power and recurring replacement demand. Management has also pointed to a $1.5 billion addressable opportunity in high-voltage transmission at the 765 kV level over the next decade, a new lane within the grid buildout. The balance sheet supports the growth, with net debt at a modest 1.66 times operating income and a share count that has held steady. The bull case is a high-quality industrial compounder positioned at the center of the electrification capital cycle.
Bear Case
The most fragile assumption in Hubbell's price is a specific number: the growth rate baked into the multiple. At about 26 times operating income, the price embeds operating-profit growth of roughly 24.7% a year for five years. Set that against what management actually guides, 8% to 11% total sales growth and 6% to 9% organic, and the gap is the bear case in a single comparison. Even with double-digit adjusted operating-profit growth at the midpoint, the price is reaching for a compounding rate well beyond the company's own outlook. The implied figure is a directional bound, not a forecast, but the direction is clear: the price is paying for the electrification boom to run hotter and longer than the company's guidance assumes.
That makes the durability of the cycle the load-bearing risk. Data-center power demand growing 40% in a quarter is the kind of number that can pull forward years of growth and then normalize; utility grid spending moves in long waves driven by rate cases and capital budgets that can be deferred. The filing is candid that not every line is booming, attributing some softness to "volume declines in enclosures products primarily driven by prior weakness in the telecom market", a reminder that Hubbell's end markets are not uniformly strong and that demand in one category can stall while another surges. If the data-center buildout cools or utility capex plans slip, the growth that the price requires evaporates faster than the secular story suggests.
The valuation pattern confirms the stretch. Only the growth-DCF method reaches the price; the asset-value, earnings-power, and peer-multiple lenses all read it as richly valued on what the company earns today. That is the signature of a durability premium, a bet that this franchise compounds in a way the static frames cannot capture, and it is justified only if the growth materializes. The balance sheet is sound, with net debt at a manageable 1.66 times operating income, so this is not a solvency risk. It is a valuation risk: a premium price on a cyclical-secular industrial, where the premium evaporates if the cycle that is currently running hot reverts toward the mid-single-digit organic growth the company itself guides to.
Valuation
The price works out to roughly 26 times company-wide operating income, which inverts to operating growth of about 24.7% a year over a five-year stage. Read that as a directional bound rather than a precise solve, but it frames the entire bet. The number sits far above the 6% to 9% organic and 8% to 11% total sales growth management guides for 2026, which means the price is underwriting either a much longer runway of elevated growth than the near-term guidance, or margin expansion stacked on top of it, or both. The electrification tailwind is real; the question the price asks is whether it is worth a 26-times multiple.
The methods disagree in the way that makes the premium explicit. The asset-value lens, the earnings-power lens, and the peer-multiple lens all read the price as richly valued on what Hubbell earns today; only the growth-DCF reaches it. When a single forward-growth method is the only one that touches the price, the market is paying for durable compounding that the static frames structurally cannot price. For a company genuinely positioned in the grid and data-center buildout, that durability premium is defensible, but it is also the precise thing the buyer is betting on, because none of the methods grounded in current earnings supports the price on its own.
Solvency is the reassuring part of the close and not the crux. Net debt of about $2.1 billion runs at a modest 1.66 times operating income, with ample liquidity and a roughly flat share count, the balance sheet of a steady cash generator rather than a stretched one. The downside is not bounded by leverage; it is bounded by the demonstrated value of a high-quality industrial franchise and by how much of the electrification growth holds. The valuation rests on the durability of the grid and data-center demand cycle outrunning the company's own conservative-looking guidance, and that, more than any balance-sheet figure, is what the price is really paying for.
Catalysts
The demand-trend catalysts are clear and quantified. Data-center sales up 40% in the first quarter, prompting a raise in the full-year data-center growth outlook to over 25%, and grid infrastructure up 12% organically, are the two lines that drive the growth narrative. Each quarter's read on these segments against full-year guidance of 8% to 11% total sales growth will show whether the secular demand is accelerating, holding, or beginning to normalize. With the price embedding growth above guidance, any deceleration in data-center or grid orders is the catalyst that matters most.
The longer-horizon opportunity and the margin path round out the picture. Management has flagged a $1.5 billion addressable opportunity in 765 kV high-voltage transmission over the next decade, a structural lane that could extend the grid buildout, and progress on capturing it is a multiyear catalyst. On profitability, the company guides to GAAP diluted earnings per share of $17.45 to $18.00 for 2026, so the quarterly cadence of margin expansion and any pull-through from operating leverage are the numbers to track against that range. The next earnings call's commentary on order backlog and end-market breadth is where the durability of the demand cycle becomes legible.
Peer Cohorts (Per Segment, With Filing Citations)
Utility Solutions (reported)
- ETN (EATON CORPORATION plc)
- FY2025 10-K: …center, utility, industrial, commercial, machine building, residential, aerospace and mobility markets. We are capitalizing on the megatrends of the electrification, digitalization, and the reindustrialization of and growth of megaprojects in North America and increased global infrastructure spending, all of which…
- FY2025 10-K: …Company continues to actively manage its portfolio of businesses to deliver on its strategic objectives. The Company is focused on deploying its capital toward businesses that provide opportunities for above-market growth, strong returns, and align with secular trends and its power management strategies. Over the…
- EMR (EMERSON ELECTRIC CO.)
- FY2025 10-K: …sustainability and safety. The Discrete Automation segment includes solenoid valves, pneumatic valves, valve position indicators, pneumatic cylinders and actuators, air preparation equipment, pressure and temperature switches, electric linear motion solutions, programmable automation control systems and software,…
- FY2025 10-K: …and software, electrical distribution equipment, and materials joining solutions used primarily in discrete industries. Products within our Discrete Automation segment are marketed under a variety of brands including: Afag, Appleton, ASCO, Aventics, Branson, Movicon, PACSystems, SolaHD, TESCOM, and TopWorx. Safety &…
- AZZ (AZZ INC.)
- FY2025 10-K: …segment is a leading provider of metal coating solutions for corrosion protection, including hot-dip galvanizing, spin galvanizing, powder coating, anodizing and plating to the North American steel fabrication industry and other industries. The AZZ Precoat Metals segment provides aesthetic and corrosion protective…
- FY2025 10-K: …• Unstable political economic conditions and public health issues or crisis, such as a pandemic, delaying our or our customer's operations; • Timing and volume of work under new or existing agreements; • General economic conditions; • Fluctuations in the budgetary spending of customers, including seasonality; •…
- POWL (Powell Industries, Inc.)
- FY2025 10-K: …support increased schedule flexibility and multiple ship lanes for the varied needs and project timelines of our customers. The incremental capacity is initially expected to support the Company's oil and gas customers but can be utilized to support each of our market sectors. Construction is expected to begin during…
- FY2025 10-K: …related to the acquisition of Remsdaq. In Fiscal 2024, we acquired land and buildings in Houston for a total cash purchase price of approximately $ 5.6 million to help further facilitate executing the current backlog as well as planning for modest future volume growth. Accrued Product Warranty Activity in our product…
- AYI (ACUITY INC.)
- FY2025 10-K: …generated from short-term contracts with our customers to deliver only tangible goods such as luminaires, lighting controls, building system controls, and audio, video, and control platform products. We record revenue from these contracts when the customer obtains control of those goods. For sales designated free on…
- FY2025 10-K: …manufacture, and bring to market products and services that make a valuable difference in people's lives. We achieve growth through the development of innovative new products and services, including lighting, lighting controls, building management solutions, and an audio, video, and control platform. We focus on…
- PNR (Pentair plc)
- FY2025 10-K: …and infrastructure flow and industrial solutions businesses have not historically been impacted by seasonal weather trends. This change does not impact the competitive landscape of the Flow segment. Water Solutions The Water Solutions segment aims to provide great tasting, higher-quality water and ice while helping…
- FY2025 10-K: …commercial and food and beverage vertical markets. Customers also include end users, consumers and original equipment manufacturers. Seasonality We experience seasonal demand with several end customers and end users within Water Solutions. End-user demand for water solution products generally follows warm weather…
Electrical Solutions (reported)
- ATKR (Atkore Inc.)
- FY2025 10-K: …is to be the customer's first choice by providing unmatched quality, delivery, and value based on sustainable excellence in strategy, people, and processes. Our Products Atkore is committed to providing our customers with a safe, sustainable, and innovative portfolio of high quality electrical, mechanical, safety,…
- FY2025 10-K: …of Electrical products primarily for the non-residential construction and renovation markets and Safety & Infrastructure for the construction and industrial markets. The Electrical segment manufactures high quality products used in the construction of electrical power systems including conduit, cable and installation…
- NVT (nVent Electric plc)
- FY2025 10-K: …solutions help protect operating environments for mission critical applications in infrastructure, industrial and commercial verticals. 22 • Electrical Connections -The Electrical Connections segment provides innovative solutions that connect power and data infrastructure. Our offerings enhance end-user safety,…
- FY2025 10-K: …liquid and air, control buildings, switchgear systems and power distribution solutions help manage protect operating environments for mission critical applications in infrastructure, industrial and commercial verticals. • Electrical Connections -The Electrical Connections segment provides innovative solutions that…
- AYI (ACUITY INC.)
- FY2025 10-K: …manufacture, and bring to market products and services that make a valuable difference in people's lives. We achieve growth through the development of innovative new products and services, including lighting, lighting controls, building management solutions, and an audio, video, and control platform. We focus on…
- FY2025 10-K: …generated from short-term contracts with our customers to deliver only tangible goods such as luminaires, lighting controls, building system controls, and audio, video, and control platform products. We record revenue from these contracts when the customer obtains control of those goods. For sales designated free on…
- ALLE (Allegion plc)
- FY2025 10-K: …with a strong channel network. We compete based on the breadth, innovation and quality of our products and solutions, pricing, our ability to custom-configure solutions to meet individual end-user requirements and our global supply chain. Customers We sell most of our products and solutions through distribution and…
- FY2025 10-K: …Engagement surveys provide a mechanism to gather direct employee feedback, give team leaders insights on potential areas of focus, and allow leaders to prioritize and act on their teams' foundational, inclusion, growth and development needs. Strengths-based leadership is an element of our commitment to inclusion: the…
- LFUS (LITTELFUSE INC /DE)
- FY2025 10-K: …and power distribution. 4 Table of Contents • Provide More Complete Solutions for a Broader Set of Customers: The Company aims to increase engagement with market leaders by transitioning from a siloed, product-centric approach to a collaborative, market-facing sales structure. This realignment will allow the Company…
- FY2025 10-K: …focused on a more sustainable, connected, and safer world. The ever-increasing advancements of applications surrounding these themes continue to drive greater demand for the Company's innovative, reliable products and a higher level of product content within a broad range of applications. Technologies within the…
- PNR (Pentair plc)
- FY2025 10-K: …and infrastructure flow and industrial solutions businesses have not historically been impacted by seasonal weather trends. This change does not impact the competitive landscape of the Flow segment. Water Solutions The Water Solutions segment aims to provide great tasting, higher-quality water and ice while helping…
- FY2025 10-K: …separation technologies for the oil and gas industry, residential and municipal wells, water treatment, wastewater solids handling, pressure boosting, circulation and transfer, fire suppression, flood control, agricultural irrigation and crop spray. • Water Solutions - The focus of this segment is to provide great…
- ETN (EATON CORPORATION plc)
- FY2025 10-K: …Company continues to actively manage its portfolio of businesses to deliver on its strategic objectives. The Company is focused on deploying its capital toward businesses that provide opportunities for above-market growth, strong returns, and align with secular trends and its power management strategies. Over the…
- FY2025 10-K: …as hazardous duty electrical equipment, emergency lighting, fire detection, intrinsically safe explosion-proof instrumentation, and structural support systems that are produced and sold globally. The majority of the sales contracts in this segment contain performance obligations satisfied at a point in time either…
Methodology Note
- Priced-in inversion: the valuation is inverted on the current price to recover the operating-income growth, duration, and steady-state margin the price embeds (ROE for financials, FFO growth for REITs).
- Valuation x-ray: the valuation models, grouped into four families (asset, earnings, relative, growth). Each model is expressed as a price/FV ratio (distance from price), not a point fair-value estimate. The spread across families is the disagreement.
- Economic-unit decomposition (SOTP): each disclosed business unit is assigned its native valuation basis before any multiple is applied. Operating units are valued on enterprise value; funded financial units are valued on their own common equity, because their borrowings fund earning assets rather than levering the parent. A company total is stated only once every material unit carries a supported value and the parent capital bridge reconciles.
- Solvency: net cash/debt, net-debt-to-NOPAT, interest coverage, and share-count CAGR from EDGAR financials (net debt / FFO and fixed-charge coverage for REITs; regulatory-capital framing for financials).
- Peer cohorts: per-segment comparables with deep-linkable SEC filing citations.
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.
Sources
Q1 FY2026 results, 2026 · company FY2026 guidance · company materials, 2026 · company FY2025 10-K