Assignment #2: Valuation
Submit a hardcopy of this assignment in the class by the due date.
Your Name:
Date:
Company:
Ticker Symbol:
Current Stock Price:
Sector:
Use 10 years of history for the valuation information below.
S&P 500 Valuation (Type in stock ticker SPX <Index> <GO>)
Absolute Basis
High
Low
Median
P/E
P/B
P/S
P/EBITDA
Current
Do you think your stock should trade at a premium multiple to the market as a whole? Why?
Think about its long-term growth and cyclicality vs. the market as a whole.
Sector Valuation (Type Bloomberg code <Index> <GO>)
Sector
Bloomberg Code
Sector
IT
S5INFT
Utilities
Financials
S5FINL
Cons Discret
Materials
S5MATR
Cons Staples
Healthcare
S5HLTH
Industrials
Telecom
S5TELS
Energy
Bloomberg Code
S5UTIL
S5COND
S5CONS
S5INDU
S5ENRS
Absolute Basis
P/E
P/B
P/S
P/EBITDA
High
Low
Median
Current
Relative to SP500
P/E
P/B
P/S
P/EBITDA
High
Low
Median
Current
Do you think your sector is relatively cheap/expensive/inline on this basis? Why?
(Answer should be determined by how the sector currently trades versus its historical norm and
whether that is warranted. Abbreviated example: Sector is trading below its 10 yr average, but
this is warranted since growth has slowed and higher risk)
Assignment #2
9/1/15
1
Consensus Revenue and Earnings Estimates
Using Bloomberg, what is the latest full calendar year of reported earnings?
Complete the table below:
Using Bloomberg (EM function), what are the latest annual reported revenues and EPS? What
are the consensus annual revenue and EPS estimates (and growth rates) for the upcoming three
years?
Year
Last reported
year
1 yr forward
estimate
2 yr forward
estimate
3 yr forward
estimate
Median
Current
Revenue
% growth from
prior year
Shares
Outstanding
Revenues per
Share
Earnings Per Share
% growth from
prior year
Stock Valuation
Use GF function in Bloomberg to find the following:
Absolute Basis
High
Low
P/E
P/B
P/S
P/EBITDA
Use <RV> function in Bloomberg and select <Comp Sheets> tab
Ticker
P/E TTM P/S TTM P/B
P/CF
EV/
TTM
EBITDA
TTM
Average
Your Ticker
Peers
Do you think the stock is relatively cheap/expensive/inline on this basis? Why?
Assignment #2
9/1/15
2
Target Price
Absolute
Valuation
Current
#Your
Target
Multiple
Target/
Current
Expected Target
EPS
Price
P/E
P/B
P/S
P/EBITDA
* Your target Earnings/Share should come from the Consensus Revenue and Earnings Estimates
section of this assignment.
There are ten sectors in the S&P500, what are the returns of each over the given time frame?
Use the TRA function in Bloomberg.
Sector
Last 12 months Last 3 months
Last 1 month
S&P500 (SPX <Index> <Go>)
Energy (S5ENRS <Index> <Go>)
Material (S5MATR <Index> <Go>)
Industrials (S5INDU <Index> <Go>)
Cons Discr (S5COND <Index> <Go>)
Cons Stap (S5CONS <Index> <Go>)
Healthcare (S5HLTH <Index> <Go>)
Financials (S5FINL <Index> <Go>)
Info Tech (S5INFT <Index> <Go>)
Telecom (S5TELS <Index> <Go>)
Utilities (S5UTIL <Index> <Go>)
When will the company next report earnings? (Ticker <Equity> DES <Go>)
Knowing what you now know, would you want to own this stock? Why?
Assignment #2
9/1/15
3