KENON HOLDINGS LTD. (KEN): what the price assumes

In the published model solve dated 2026-Q2, anchored at $66.54, KENON HOLDINGS LTD. (KEN) is priced for +14.2% 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: 2026-08-10 · Exported: 2026-08-12 · Source: https://boothcheck.com/report/KEN

Headline

What The Price Assumes (Inversion)

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

The operating-margin figure is value-band context at year 10: derived from the framework's value band, a separate calculation — not part of the priced-in solve.

Solve inputs: computed at a 7% cost of capital with 4% terminal growth over a 5-year stage; each 1pp of cost of capital moves the implied operating-profit growth ~9.7pp (computed at the 7% minimum rate; the CAPM rate 6.4% sits below it).

Reconcile: at the x-ray's 9.3% required return this reads ~7.1 years; the models below use their own rates.

How unusual the bet is: within-range

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.

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 7.4%); the inversion above states its own rate.

Per-Model Detail (n=18)

Solvency

Bullet Takeaways

• Kenon Holdings is a holding company, not an operating business, and its value is essentially one asset: a roughly 46% stake in OPC Energy, a power generator operating in Israel and the United States, after Kenon fully exited its ZIM shipping position.
• The single decisive number is the value of the OPC stake against Kenon's own market value, since traditional earnings multiples are the wrong lens for a holding company and a NAV-based read is what matters.
• Watch capital returns and OPC's growth, with Kenon distributing about $200 million in dividends in April 2026 while OPC's first-quarter revenue grew to $317 million on US and Israeli expansion.

Bull Case

The number that matters for Kenon is not an earnings multiple; it is the value of what it owns, and what it owns is a controlling-sized stake in a growing power business. Kenon holds roughly 46% of OPC Energy, and OPC is in an expansion phase across two markets: first-quarter revenue grew to $317 million from $183 million a year earlier on higher electricity sales in Israel and the US, including the consolidation of CPV Shore and expansion of US retail activities. For the full prior year, OPC's adjusted EBITDA including associates climbed to $457 million from $332 million, with associate income rising sharply. A holding company is worth the sum of its parts, and the central part here is a power platform that is materially larger than it was a year ago.

Management has also simplified the story and returned cash, which is what makes a holding-company discount narrow. Kenon fully exited its ZIM exposure by settling a capped call, generating about $34 million of gross proceeds and removing a volatile shipping asset from the picture. That leaves a cleaner structure centered on OPC, which is easier for the market to value. At the same time, Kenon distributed about $200 million in dividends in April 2026, a large return relative to its market value that hands shareholders cash directly rather than leaving it trapped behind a holding-company structure.

The balance sheet at the parent level is sound even though the consolidated figures look levered. Kenon itself holds substantial liquid assets, roughly $1.5 billion, against modest parent-level net debt, with most of the debt sitting inside OPC against its power projects rather than at the holding company. That distinction matters: project debt is serviced by the contracted cash flows of the power assets, not by the parent, so the holding company has the flexibility to keep returning cash and to fund its share of OPC's growth. A clean holding company, anchored to a growing power platform, holding large liquidity and paying out sizable dividends, is a NAV story where the underlying asset is compounding.

Bear Case

Read on its consolidated face, Kenon looks expensive, and that disconnect is the place to start. The consolidated operating margin is thin at about 5.4%, and on a whole-company basis the price sits at a high multiple of operating income, with the asset-value, earnings-power, and peer-multiple methods all reading it as richly valued and only the growth-based method reaching the price. The reason is that consolidated accounting blends the parent with OPC and its project economics, producing a picture that does not cleanly represent either the holding company or the underlying power business. An investor who anchors on the consolidated earnings multiple is using the wrong tool, but an investor who relies on the NAV story has to trust an OPC valuation that is itself uncertain.

The structural drawbacks of a holding company are the real bear case. Holding companies routinely trade at a discount to the value of their parts because shareholders cannot directly control the underlying asset, the parent takes a layer of cost, and the value depends on management choosing to surface it rather than reinvest at lower returns. Kenon's value is now concentrated in a single asset, OPC, which removes the diversification the ZIM stake once provided and ties the whole thesis to one power platform's execution in Israel and the US. Concentration cuts both ways: it simplifies the story, but it also means a setback at OPC, a regulatory change in Israeli power, a financing problem on a US project, or a margin squeeze, flows straight through to Kenon with nothing to offset it.

The financing picture reinforces the caution. Consolidated interest coverage is very thin, a function of the heavy project debt OPC carries to build and operate power plants, and OPC's own first-quarter net profit actually fell to $14 million from $25 million as costs and financing expenses rose. Power generation is capital-intensive and rate-sensitive, and a rising-cost environment pressures the returns on the projects that constitute Kenon's value. The bet a buyer makes at this price is that OPC's expansion compounds value faster than its financing costs and the holding-company discount erode it, in a single-asset structure with little margin for a stumble.

Valuation

The standard valuation lens fails here, and saying so is the honest start. Kenon is a holding company, so its consolidated operating multiple, around 34 times operating income, is not a meaningful read; it blends the parent with OPC's consolidated power economics. The asset-value, earnings-power, and peer-multiple methods all read the consolidated entity as expensive, and only the growth method reaches the price, but for a holding company that pattern reflects the accounting structure more than the underlying value.

The right frame is net asset value: what is Kenon's roughly 46% stake in OPC worth, plus its parent-level cash, less parent debt, against the share price. OPC is growing, with adjusted EBITDA including associates up sharply year over year, so the underlying asset is appreciating; the question is whether the market values Kenon at a discount or premium to that NAV. The exit from ZIM and the large dividend both work to narrow any discount by simplifying the structure and returning cash. A reader should treat the consolidated multiples as noise and the trajectory of OPC's value, plus the parent's capital-return behavior, as the real valuation drivers.

On solvency, the key distinction is parent versus consolidated. The consolidated balance sheet carries heavy project debt at OPC, which is why interest coverage looks thin, but that debt is serviced by the power assets' contracted cash flows rather than by the holding company. At the parent level Kenon holds large liquidity against modest debt, which supports its dividends and its ability to fund OPC's growth. The genuine risk in the valuation is not parent insolvency; it is the single-asset concentration and the dependence on OPC's capital-intensive expansion delivering returns above its rising financing costs.

Catalysts

The recent results centered on OPC and on capital return. OPC reported first-quarter 2026 revenue of $317 million, up from $183 million a year earlier on higher electricity sales in Israel and the US, the consolidation of CPV Shore, and expanded US retail activity, though OPC net profit fell to $14 million from $25 million as costs and financing expenses rose. For full-year 2025, consolidated revenue rose to $872 million from $751 million and profit from continuing operations grew to $148 million from $53 million.

The two corporate catalysts were the dividend and the ZIM exit. Kenon distributed about $200 million in cash dividends in April 2026, and it settled a capped call over five million ZIM shares for about $34 million of gross proceeds, fully exiting its ZIM exposure. The signals to track are OPC's expansion in its US and Israeli markets, the financing costs on its power projects, and Kenon's ongoing capital-return policy, since for a holding company the pace at which it surfaces and distributes the value of its OPC stake is the clearest driver of shareholder return.

Peer Cohorts (Per Segment, With Filing Citations)

Core business (reported)

• PRDO (Perdoceo Education Corporation)
• FY2025 10-K: …within Corporate and Other. The increase in operating income for the current year was a result of revenue growth and continued management of operating expenses. The Company believes it is useful to present non-GAAP financial measures, such as adjusted operating income, which exclude certain non-cash items, as a means…
• FY2025 10-K: …operations, such as the 90-10 Rule and GE. We have experienced increased competition as more postsecondary education providers increase their online program offerings (in particular programs that are geared towards the needs of working adults), including traditional and community colleges that had not previously…
• STNG (STNG)
• FY2025 20-F: …results of operations than if we maintained more diverse assets or lines of business. Adverse developments in the tanker business could therefore reduce our ability to meet our payment obligations and our profitability. A shift in or disruption of the consumer demand away from crude oil towards other energy…
• FY2025 20-F: …enable them to enhance utilization rates for pool vessels by securing backhaul voyages and COAs, thus generating higher effective TCE revenues than otherwise might be obtainable in the spot market while providing a higher level of service offerings to customers. Operating days . Operating days are the total number of…
• TNK (TEEKAY TANKERS LTD.)
• (no filing in the citation store)
• CPK (CHESAPEAKE UTILITIES CORP)
• FY2025 10-K: …outside services costs, and higher depreciation and vehicle expenses compared to the prior year. Adjusted Gross Margin Items contributing to the year-over-year increase in adjusted gross margin are listed in the following table: (in millions) Propane Operations Increased propane customer consumption $ 4.5 Change in…
• FY2025 10-K: …increased by $2.6 million due to increased customer consumption related to the effects of colder weather in our Ohio service area and resulting from higher consumption from agricultural customers compared to the prior year. Other Operating Expenses Items contributing to the year-over-year increase in other operating…
• INSW (International Seaways, Inc.)
• FY2025 10-K: …and dynamics that have an impact on the Company's financial position and results of operations. ​ ● Results from Vessel Operations. This section provides an analysis of our results of operations presented on a business segment basis. In addition, a brief description of significant transactions and other items that…
• FY2025 10-K: …are net of broker/address commissions. ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 2025 ​ 2024 ​ ​ Spot Earnings ​ Fixed Earnings ​ Spot Earnings ​ Fixed Earnings LR2: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Average rate ​ $ - ​ $ 39,485 ​ $ 53,159 ​ $ 39,500 Revenue days ​ ​ - ​ ​ 364 ​ ​ 149 ​ ​ 161 LR1 (1)(2) : ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​…
• MGEE (MGE Energy, Inc.)
• FY2025 10-K: 5 rate order included an earnings sharing mechanism, under which, if MGE earns above the 9.7% ROE authorized in the rate order: (i) MGE will retain 100% of earnings for the first 15 basis points above the authorized ROE; (ii) 50% of the next 60 basis points will be required to be deferred and returned to customers;…
• FY2025 10-K: Other Matters " below for summarized financial information regarding ATC. All Other Operations - MGE Energy Other income The increase of $0.6 million in other income from all other operations during 2025 compared to 2024, primarily reflects results from investment gains recognized in the current year, from venture…
• GSL (Global Ship Lease, Inc.)
• FY2025 20-F: 4 Table of Contents We will face substantial competition in expanding our business from a number of companies. Many of these competitors may have greater financial resources and a lower cost of capital than us, may operate larger fleets, may have been established for longer, and may be able to offer better charter…
• FY2025 20-F: …generally lowered their loan-to-value advance ratios, shortened loan terms, and accelerated repayment schedules. The actual or perceived credit quality of our charterers and proposed charterers, and any defaults by them, may materially affect our ability to obtain the additional capital resources that we will require…
• AD (AD)
• FY2025 10-K: …to earnings before interest, taxes, depreciation, amortization and accretion, gains and losses and other nonrecurring expenses. See Supplemental Information Relating to Non-GAAP Financial Measures within this MD&A for additional information. ▪ Adjusted OIBDA - non-GAAP measure referring to operating income before…
• FY2025 10-K: …for additional information. Current portion of long-term debt Current portion of long-term debt decreased $17.9 million due primarily to the repayment of all outstanding debt on the term loan agreements and receivables securitization agreement. Customer deposits and deferred revenues Customer deposits and deferred…

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.
• 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.