Graham Intrinsic Value
EliteFair value from EPS × growth — price vs the lineGraham's intrinsic value (Benjamin Graham, The Intelligent Investor, 1974 revision) = normalized (multi-year average) EPS × (8.5 + 2g) × 4.4 ÷ Y, where g = the analyst forward 5-year growth estimate (percent, capped at 15% — the formula weights growth 2× and isn't built for cyclicals on peak earnings; names with no credible estimate are dropped), 8.5 = Graham's base P/E for a no-growth company, 4.4 = the 1962 AAA-bond baseline and Y = the current AAA yield (assumed 5.0% — no live yield feed yet). It only exists for positive EPS, so loss-makers are dropped, and it's snapped to the live price. Graham's number is a best-case ceiling — the most his formula says a name is worth — so a big gap below it means price trades far under a generous estimate, not that there's that much guaranteed upside. Fundamentals as of the latest scan. Not investment advice.
How it works
Graham's other formula, from the revised Intelligent Investor. Start with what a no-growth company should be worth — eight and a half times earnings — add twice the expected growth rate, then adjust for prevailing bond yields.
He published it to show what growth assumptions a market price was already making, not as a valuation to act on. Read backwards it is far more useful: at today's price, what growth is being priced in, and is that plausible?
When it misleads
Everything depends on g, and g is a guess. Move the growth assumption two points and the answer moves by a third.
Graham was sceptical of it himself. He wrote that a formula like this cannot substitute for judgement about the business, and he was right.
| # | Ticker | Price | Fair value | vs fair value | EPS | Est. growth | Verdict |
|---|---|---|---|---|---|---|---|
| 101 | TDY | $618.85 | $602.30 | +2.7% | 17.78 | 25% | Near fair value |
| 102 | DHR | $230.29 | $223.44 | +3.1% | 6.59 | 38% | Near fair value |
| 103 | DUK | $127.77 | $123.43 | +3.5% | 4.72 | 11% | Near fair value |
| 104 | D | $68.61 | $66.00 | +4.0% | 2.31 | 12% | Near fair value |
| 105 | IBM | $244.94 | $233.26 | +5.0% | 6.88 | 25% | Near fair value |
| 106 | FICO | $704.78 | $661.51 | +6.5% | 19.52 | 27% | Near fair value |
| 107 | NDSN | $309.90 | $287.05 | +8.0% | 8.47 | 23% | Near fair value |
| 108 | LHX | $259.97 | $239.96 | +8.3% | 7.08 | 33% | Near fair value |
| 109 | ORLY | $89.89 | $81.35 | +10.5% | 2.62 | 13% | Above fair value |
| 110 | EFX | $189.62 | $171.18 | +10.8% | 5.05 | 39% | Above fair value |
| 111 | CBRE | $135.50 | $122.22 | +10.9% | 3.61 | 26% | Above fair value |
| 112 | MS | $181.39 | $161.55 | +12.3% | 7.37 | 8% | Above fair value |
| 113 | MCK | $1061.20 | $944.57 | +12.3% | 27.88 | 17% | Above fair value |
| 114 | WM | $236.25 | $208.02 | +13.6% | 6.14 | 38% | Above fair value |
| 115 | CTVA | $11.89 | $10.30 | +15.4% | 1.38 | -10% | Above fair value |
| 116 | CB | $365.06 | $314.15 | +16.2% | 20.63 | 4% | Above fair value |
| 117 | AMGN | $460.15 | $392.92 | +17.1% | 11.60 | 19% | Above fair value |
| 118 | TT | $401.68 | $342.78 | +17.2% | 10.12 | 25% | Above fair value |
| 119 | EXPE | $259.17 | $221.10 | +17.2% | 6.56 | 15% | Above fair value |
| 120 | AME | $228.57 | $194.89 | +17.3% | 5.75 | 16% | Above fair value |
| 121 | ICE | $172.25 | $146.70 | +17.4% | 4.33 | 18% | Above fair value |
| 122 | MSFT | $530.44 | $449.50 | +18.0% | 13.27 | 32% | Above fair value |
| 123 | CRCL | $67.87 | $56.24 | +20.7% | 1.66 | 32% | Above fair value |
| 124 | GRMN | $285.74 | $234.11 | +22.1% | 6.91 | 35% | Above fair value |
| 125 | TPL | $272.14 | $218.74 | +24.4% | 6.46 | 38% | Above fair value |
| 126 | LULU | $110.78 | $87.48 | +26.6% | 11.69 | -6% | Above fair value |
| 127 | RVTY | $155.12 | $121.97 | +27.2% | 3.60 | 38% | Above fair value |
| 128 | CHD | $109.33 | $85.72 | +27.5% | 2.53 | 19% | Above fair value |
| 129 | KKR | $96.45 | $75.55 | +27.7% | 2.23 | 40% | Above fair value |
| 130 | DE | $671.82 | $523.01 | +28.5% | 25.51 | 7% | Above fair value |
| 131 | HPQ | $28.46 | $22.01 | +29.3% | 2.94 | -11% | Above fair value |
| 132 | MTD | $1721.21 | $1328.43 | +29.6% | 39.21 | 16% | Above fair value |
| 133 | KVUE | $19.31 | $14.85 | +30.0% | 0.82 | 6% | Above fair value |
| 134 | NDAQ | $107.09 | $79.28 | +35.1% | 2.34 | 32% | Above fair value |
| 135 | SYF | $73.80 | $54.55 | +35.3% | 7.29 | -6% | Above fair value |
| 136 | EG | $411.05 | $302.97 | +35.7% | 36.24 | 1% | Above fair value |
| 137 | CASY | $687.80 | $500.92 | +37.3% | 14.79 | 28% | Above fair value |
| 138 | AVY | $186.75 | $135.47 | +37.8% | 8.23 | 5% | Above fair value |
| 139 | AIZ | $307.08 | $222.50 | +38.0% | 12.10 | 6% | Above fair value |
| 140 | ITW | $280.96 | $202.79 | +38.5% | 10.43 | 7% | Above fair value |
| 141 | AON | $334.74 | $237.11 | +41.2% | 13.54 | 6% | Above fair value |
| 142 | TRGP | $264.58 | $186.71 | +41.7% | 5.51 | 23% | Above fair value |
| 143 | V | $422.65 | $298.23 | +41.7% | 8.80 | 22% | Above fair value |
| 144 | IBKR | $75.82 | $53.42 | +41.9% | 1.58 | 17% | Above fair value |
| 145 | MSCI | $641.30 | $450.10 | +42.5% | 13.71 | 14% | Above fair value |
| 146 | NSC | $320.09 | $222.69 | +43.7% | 11.55 | 7% | Above fair value |
| 147 | O | $59.05 | $40.91 | +44.3% | 1.21 | 24% | Above fair value |
| 148 | HD | $343.39 | $237.30 | +44.7% | 15.23 | 5% | Above fair value |
| 149 | DHI | $152.25 | $105.17 | +44.8% | 14.06 | -12% | Above fair value |
| 150 | MCO | $505.63 | $348.12 | +45.2% | 10.28 | 18% | Above fair value |