Price Performance
Risk Adj Returns % Past Month % Quarter % Half Year % 1 Year
XXX PlC
FTSE-100
Risk Adj.


Data as of XX/04/2020
Source: XXX
XXXX PLC

Adj. Beta
or Beta
P/Book OP Margin XXX


FY 2020
Estimate FY 2021
Estimate FY 2022
Estimate FY 2023

Valuations
PE DY PB PS DDM

XXX PLC


Sector/industry :
Ticker : XXX LN Date: XXXX

Company Profile:
Market Price: XXX GBp
Our Valuation: XXX GBp
Our Recommendation: XXX

XXX PLC vs FTSE 100
Analyst’s Recommendation: XXX Analyst’s Consensus: BUY: XXX HOLD: XXX SELL: XXX


Introduction:
About the company
Risk Adjusted Returns:
Calculations of monthly risk adjusted returns using 2 year adjusted beta as XX/04/2020 = XXXX.
Company return – beta*return on market (assume alpha=0)

News:
Date News Summary Brief Comments
XX/XX/2020
12:53:32
Firm Specific


XX/XX/2020
11:46:41
Firm Specific

XX/XX/2020
22:36:24
Systematic

XX/XX/2020
18:43:22
Systematic





XXX PLC (%) FTSE-100
(%)
Numerical Calculations Risk
Adjusted
Returns (%)
Jan-20
Feb-20
Mar-20
Apr-20
May-20
Jun-20
Jul-20
Aug-20
Sep-20
Oct-20
Nov-20
Dec-20



Valuation:
Multi-stage DDM:
The performance of DPS has been a solid state of steady growth, with the compound annual growth
rate from 2011-2020 at XXX%. The EPS growth was not as steady and fluctuated sharply, especially in
20XX, however recovering the following year. The compounding annual growth rate for EPS 2011-2020
was XX%.
DPS EPS ROE B (1-Payout Ratio) G DPS
Growth
EPS
Growth
2011
2012
2013
2014
2015
2016
2017
2018
2019
2020

For illustration purposes only and numbers/calculations might not be accurate
Firstly, will be calculated using the CAPM formula to help find the intrinsic value of the share using
the discount dividend model. The current UK risk free rate is 1.6% (return on a 10y gilt), the UK 1yr
expected return is 6.6% (5% + 1.6%) and the 2yr adjusted company beta is 1.788. Using these
numerical values the cost of equity for XXX LN can be calculated as: = + (() − = 0.016 + 1.788 (0.066 − 0.016) = 0.1054 10.54%
In order for greater accuracy the DPS for 2020 will be used as it is the most up to date data. The DPS
and EPS for 2020 are 217.47GBp and 184.08GBp respectively. The plowback ratio can be calculated
as: = 1 − % 2020 2020- = XXX
The ROE for 2020 was 20.13% and this value allows for an estimation calculation for the long term
growth rate, seen in column G in the table above: = 2020 = XXX
For the years 2021, 2022 and 2023 I used XXXX estimates for the DPS as they are a well-respected
provider of market information. They were as follows: Estimate 2021 = 203.50, Estimate 2021 = 205.35
and Estimate 2022 = 208.62.
For the years 2024 and 2025 I estimate that dividends will grow at a rate of XXXX% per annum. This
figure is derived from the XXXXX .
The above for illustration purposes only you can arrive to the g number 2024 onwards based on
another sequence of assumptions which will enable you to calculate the multistage DDM.

Economic Model Forecast:
The growth rate used here was XXX%. This is the Bank of England’s Inflation rate of XXX% plus the UK
long term growth potential of XXX%.
Valuation by Comparable Methods:
For illustration purposes only and numbers/calculations might not be accurate
Fair Value by PE:
Using the value of 25.04 as the PE for the sector median and 1.84 as the current EPS. All data was
sourced from XXX. ( ) = × = 25.04 1.84 = 4607.36
Fair Value by DY:
The dividend yield for the sector median is 3.64% and the current DPS for XXX LN is 2.17 ( ) = = 2.170.0364 = 59.615 = 5961.54
Fair Value by PB:
XXX provides the price to book of XXX LN and the sector median of 5.69 and 4.13 respectively. The
current market price of XXX on 6th March 2020 was 4838.50, therefore the BPS can be calculated and
thus the fair value: = = 4838.505.69 = 850.35 ( ) = × = 850.35 4.13 = 3511.95
Fair Value by PS:
The price to sales for XXX LN and the sector median are 3.79 and 3.69 respectively. The SPS (Sales per
share) can be calculated and thus the fair value:
= "#$%&''' () " *+ ,-.& = /010.341.56 = 1276.65 ( ) = × = 1276.65 3.69 = 4710.84
Comparable Valuation Results:
For illustration purposes only and numbers/calculations might not be accurate
After calculating the results for PE, DY, P/B and P/S, I will utilise a weighting measurement to find the
intrinsic value of the share. I have chosen a XXX% weighting for each of the methods. This is based on
the assumption that each method is equally important.
Weight Valuation Method SV (GBp) W x SV (GBp)
XX% Sector Price to Earnings
XX% Sector Dividend Yield
XX% Sector Price to Book
XX% Sector Price to Sales
100% Intrinsic Value by the Comparative Valuations Approach


Why did you chose such weights ??? and why did you included all the methods ?
Final Valuation:
Weight Valuation Method (GBp) W x SV (GBp)
XXX % Multistage DDM
XXX % Comparative Valuation

100.00% Intrinsic Value of XXX PLC (as of XX/04/20) Weighted Average XXX

Why did you chose such weights ???
Discussion:
In the valuation of the share price using the DDM model …….
The Price Multiples methods is another simple method for valuing stocks. ……

SML Analysis:

Analysts Recommendation:

Conclusion:


























































































































































































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