Mod 9 valuation of equity panera
Download
1 / 11

Mod 9 Valuation of Equity —Panera - PowerPoint PPT Presentation


  • 103 Views
  • Uploaded on

Mod 9 Valuation of Equity —Panera . Yiwen Lin. Agenda. Equity value of the firm U sing analysts forecasts as shortcut to valuation Dividends discount model Residual earnings model Estimating equity value per share Long-term growth rate in earnings/sales

loader
I am the owner, or an agent authorized to act on behalf of the owner, of the copyrighted work described.
capcha
Download Presentation

PowerPoint Slideshow about ' Mod 9 Valuation of Equity —Panera ' - ratana


An Image/Link below is provided (as is) to download presentation

Download Policy: Content on the Website is provided to you AS IS for your information and personal use and may not be sold / licensed / shared on other websites without getting consent from its author.While downloading, if for some reason you are not able to download a presentation, the publisher may have deleted the file from their server.


- - - - - - - - - - - - - - - - - - - - - - - - - - E N D - - - - - - - - - - - - - - - - - - - - - - - - - -
Presentation Transcript
Mod 9 valuation of equity panera

Mod 9 Valuation of Equity —Panera

Yiwen Lin


Agenda
Agenda

  • Equity value of the firm

  • Using analysts forecasts as shortcut to valuation

  • Dividends discount model

  • Residual earnings model

  • Estimating equity value per share

  • Long-term growth rate in earnings/sales

  • Sensitivity analysis matrix

  • Adjustments

    Note: The company issued 2013 10K so the financial statements are updated.




Dividends discount model
Dividends discount model

  • Conclusion: Not applicable to Panera since Panera does not distribute dividends in the past. The company does not have a plan for dividends neither.


Residual earnings model
Residual earnings model

  • Conclusion: the growth rate of residual earnings is similar to the cost of equity capital in Module 6, which is 9.10%. It appears that the company has not reached the steady state within the horizon. Thus, we assume a growth rate at 3% for estimation per se (match the estimation made in Mod6, 7, and 8).


Estimating equity value per share assume growth rate at 3
Estimating equity value per shareAssume growth rate at 3%

  • Refer to Module 6,7, and 8, we estimated a growth rate of 3% in the long-term, completely phased-out in 2018.

  • Reference: Estimated per share equity value = $205.95

  • Conclusion: Not reliable way to obtain an indication of value


Long term growth in earnings sales
Long-term growth in earnings/sales

  • PNRA stock price as of 03/19/2014: $186.68

  • In this scenario, we calculated a residual income growth rate of 5.83%. Compared to our estimation of 3%.


Long-term growth in earnings/sales

  • Expected long-term growth rate in earnings and sales is 17%. This number seems highly inflated.



Adjustments
Adjustments

  • Adjusting date of value estimate ($ in thousands)

  • Panera FYE = 12/31/2013 Valuation date = 03/19/2014

  • January 31days

  • February 28days

  • March 19days

  • Total 78days

  • Mid-year adjustment ($ in thousands)


ad