Equity valuation

: Essilor International Compagnie Générale d'Optique SA

Abstract

This dissertation aims to expose the analysis and methodology followed to construct a consolidated valuation assessment for Essilor International S.A. This process included the development of a literature review, an exploration of the macroeconomic environment where the company is inserted and a microeconomic analysis comprising activities diversification, past performance scrutiny and strategy implementation. Afterwards, model input projections are presented and a DCF-WACC valuation method, an EVA model and a relative valuation exercise are implemented. Upon, disperse results and valuation models drawbacks, the first model employed is believed to deliver the most accurate results. Therefore, the resultant output marketed a target share price expectation, referent to 2016, at 125,04€. This valuation is the object of a sensitivity analysis that tested inputs, such as cost of sales, terminal growth rate, WACC and currencies exchange rates effects on revenues. The exercise ends with a comparison with an equity research note on Essilor issued by Société Générale.

Date of Award	10 May 2016
Original language	English
Awarding Institution	Universidade Católica Portuguesa
Supervisor	José Carlos Tudela Martins (Supervisor)