Equity valuation

: Sainsbury

Abstract

The company valuation assumes a complex, challenging and surrounded by uncertainty process, comprising a huge set of dynamic variables, subject to different theoretical models of evaluation, from which is expected to reach a value close to the fair value of the company. The dissertation focused on Sainsbury’s valuation, a British retail company. The objective centralized on the establishment of an investment strategy through a buy or sell recommendation as a result of the prior determination of the fair price per share and respective comparison with the current market price. For this purpose, it was pursued a literature review, seeking a diversity of perspectives on the subject. Subsequently, was proceeded the analysis of the company as well as the industry analysis in which it operates. For the evaluation of the retail business of Sainsbury, was considered the "Discounted Cash -Flow" valuation model. Additionally, it was also considered Multiples to corroborate the results from the first model. In turn, for the evaluation of Sainsbury’s banking was considered the DuPont model as well as Multiples. Whereas the assessment as a whole, the price per share obtained amounted to 404.10 GBP. As at March 31, 2015, the price per share Sainsbury's was being traded to 259.20 GBP. Thus, we recommend investors to adopt a strategy of buying these shares.

Date of Award	28 Oct 2016
Original language	English
Awarding Institution	Universidade Católica Portuguesa
Supervisor	José Carlos Tudela Martins (Supervisor)