DCF Archives - Gifted Analysts

Equities Valuation: The Impact of Including Share Buybacks in the Dividend Discount Model

By Adebowale AterePosted on July 14, 2023Posted in Business & FinanceTagged Apple, DCF, DDM, Hershey, Model, Share BuybacksNo Comments

There are both advantages and disadvantages to including share buybacks cash flows in the valuation. One advantage is that it provides a more accurate representation of how the company is returning cash to its shareholders. Since share buybacks are another means by which companies return cash to shareholders, it makes sense to include them in the valuation. Another advantage is that including share buybacks can provide a more accurate picture of the company’s financial health. If a company consistently buys back shares, it may indicate confidence in its future earnings.

On the other hand, one disadvantage of including share buybacks cash flows in the valuation is that it can make the valuation more complex. Since share buybacks are not as straightforward as dividends, accurately factoring them into the valuation can be more challenging. Additionally, share buybacks can be less predictable than dividends, making it more difficult to accurately forecast future cash flows.

The Hershey Company: Unwrapping the Potentials and Digging into the Chocolate Numbers

By Adebowale AterePosted on July 12, 2023Posted in Business & FinanceTagged Chocolate, DCF, Hershey, Nestle, ValuationNo Comments

The Hershey Company is a leading American multinational chocolate manufacturer that also produces baked goods, beverages, and other products. Operating under 80 brands in 70 countries, Hershey’s is a global leader in chocolate, sugar confectionery, and chocolate related grocery products. The company prides itself on its values driven approach to snacking, offering moments of goodness through its more than 90 brands and products. Hershey’s values include togetherness, integrity, making a difference, and excellence.

Hershey’s offers a wide variety of flavours, sizes, and variations of its products. Popular items include Hershey’s Milk Chocolate Bar, Hershey’s Special Dark Mildly Sweet Chocolate Bar, Hershey’s Air Delight Chocolate Bar, Hershey’s Milk Chocolate with Almonds Bar, Hershey’s Cookies ‘ Creme Bar, Hershey’s Drops, and Hershey’s Miniatures. The company sells its products to a diverse range of customers through various channels, including its own retail stores and online. With a wide range of products catering to different income and age groups, Hershey’s target market is essentially everyone.

An Analysis of Apple Inc.’s Financial Performance and Growth Prospects

By Adebowale AterePosted on July 10, 2023Posted in Business & FinanceTagged Apple, DCF, Facebook, Google, iPhone, ValuationNo Comments

Apple is the largest technology company in the world in terms of revenue and market capitalization and is
among the Big Five American information technology companies, which also includes Alphabet (Google), Amazon, Meta (Facebook), and Microsoft. The Americas is Apple’s biggest regional market, encompassing both North and South America. Other significant markets include Europe (comprising European countries as well as India, the Middle East and Africa), Greater China (encompassing mainland China, Hong Kong, and Taiwan), Japan, and the Rest of Asia Pacific (including Australia and other Asian countries not included in the company’s other reportable segments).

Flour Mills Nigeria Plc: Showcasing Unprecedented Progress in the Growth of Organic Sales and Profitability

By Adebowale AterePosted on June 7, 2023Posted in Business & FinanceTagged Agriculture, DCF, Flourmill, Food, Honeywell, Nigeria, Valuation1 Comment

With the Nigerian government’s
ongoing focus on promoting agricultural development through its policies and budgetary plans, Flour Mills Nigeria Plc can leverage this support to build a strong agribusiness that can meet domestic food demand, generate export revenue, and create jobs. How
effectively is the company taking
advantage of this opportunity?

Stock Pitch – Dangote Sugar Refinery Plc

By Solomon Sele AyebawanaemiPosted on December 15, 2022Posted in Business & FinanceTagged Dangote sugar, DCF, DDM, Opportunities, Risks, Stock pitch, ValuationNo Comments

We recommend a BUY on DANGSUGAR based on our target price of N26.31. This representing a potential 72.0% upside on the closing price of N15.30 as of 14th December, 2022.
Year-to-date (YTD), DANGSUGAR has dropped -10% compared to +13.54% and -5.4% for the NGX-ASI and the NGX-CONSUMER GOODS index respectively. Due to this, the stock is trading at its 52-week low of N15.30 per share, creating a value opportunity for investors.

Transcorp Hotels PLC; Proven resilience amidst strong economic headwinds.

By Jude NwaonuPosted on July 18, 2022Posted in Business & FinanceTagged Coronavirus, COVID, DCF, Hotel, Rent, Revenue, Transcorp, ValuationNo Comments

We arrived at a target price of N24.6 per share on Transcorp hotel PLC based on a mix of two valuations metrics- the DCF model with an intrinsic share value of N27, and the DDM with an intrinsic share value of N22. We attributed a weight of 60% and 40% to each methodology, respectively, to arrive at our target price.

How Resilient is NVIDIA in the Face of Today’s Downturn?

By Sheriffdeen AdeotiPosted on July 4, 2022Posted in Business & FinanceTagged DCF, EBITDA, NVIDIA, Stocks, US Fed, ValuationNo Comments

The global economy is off to a rough start in 2022, with the Russia-Ukraine conflict, China’s lockdown,
supply chain chaos, decades-high inflation, soaring oil prices, and increased global market uncertainty all
playing a role. This year has seen billions of dollars wiped off NVIDIA’s market capitalization, just like
other tech giants (down 48 percent YTD). Is NVIDIA well-equipped to weather the current bear market?

Is a NETFLIX Comeback on the Horizon?

By Sheriffdeen AdeotiPosted on June 25, 2022Posted in Business & FinanceTagged Comparative valuation, DCF, Inflation, Netflix, Subscribers, ValuationNo Comments

NETFLIX started the year on a rough note as the platform reportedly lost 200k subscribers in Q1-22, the first time in over a decade. The streaming giant is also expected to lose 2 million more subscribers in the second quarter of 2022. Can NETFLIX make a rebound from this trajectory? How will NETFLIX fare during the post-lockdown era?

BUACEMENT: A Dive into Company Performance and Financial Analysis

By Jude NwaonuPosted on May 7, 2022Posted in Business & FinanceTagged BUACEMENT, DANGCEM, DCF, DDM, Financial Performance, GDP, Nigeria, ValuationNo Comments

We issue a sell recommendation on BUA Cement PLC(BUACEMENT.NSE) Based on a target price of ₦58.6k representing a 13% downside on the closing price of ₦70.75 as of march 30th, 2022. Our valuation is based on a methodology mix of Discounted cash flow model (70%), Dividend discount model (10%) and Multiples valuation (20%).

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