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1 Relative Valuation Using Bloomberg

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87 views15 pages

1 Relative Valuation Using Bloomberg

Na

Uploaded by

ravi gupta
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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Download as PDF, TXT or read online on Scribd
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Relative Valuation

Using Bloomberg
Understanding a multiple of a firm

To understand the nature of the multiple, compare the behavior of a


multiple:
i. Over the past of the company
ii. Compare it with the peers
iii. Compare it with the market

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Shilpa Peswani
Steps to investigate about a firm
1. Choose a company
2. Type RV in the command line
▪ The RV screen is divided into 3 parts:
▫ Segments: shows the businesses the company is in currently
▫ Metric: shows the current multiples of the company in comparison to its
peers, the high and low of that multiple in the industry and where the
peers stand
▫ The tabs in the bottom half: The overview tab shows information on
companion variables of equity multiples

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Shilpa Peswani
RV

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Shilpa Peswani
RV
Comp Sheets
Equity Valuation

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Shilpa Peswani
RV
Comp Sheets
Profitability

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Shilpa Peswani
EQRV

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EQRV
▪ EQRV helps to know whether the company is fairly priced compared to its
historical performance on a standalone basis and as compared to its peers
▪ The Blended forward PE (BFPE) normalises the reporting period in case the
when comparables have different accounts closing periods.

▪ This shows that PE of the company is 8% more than the mean of its industry
peers. But is it normal to pay 8% premium for the company?
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Shilpa Peswani
EQRV
We observe that the historical premium has been -13%. Is the difference between 8% and -13%
minimal, dramatic or inconsequential? We can see in the 2Yr historical premium range chart that
it moved between -40% and 27%.
Implied multiple = -13% x 19.9x = 17.3x. Implied price = 1yr forward EPS of 250.78 x 17.3x = 4330.93.
Current price = 5364.90 (over-valued)

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Shilpa Peswani
ANR
Analyst Ratings ANR
forecast 1 year’s
return from investing
in the stock

Example given in the


13th slide of
computation of 1 yr
Rtn column

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ERN
ERN
displays
past history
of earning
releases

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EE
EE gives
earnings
estimate
s

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ANR e.g.

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