Equity valuation of OSRAM Licht AG

Abstract

The work at hand presents a valuation of the German lighting company OSRAM Licht AG with the objective of determining the fair value of the company. First, a literature review presents the latest techniques in equity valuation and the appropriate methods for the valuation of OSRAM Licht AG are defined. Subsequently, the company and the industry it operates in are presented in more detail. Based on the assumptions and fore-casts made, the Discounted Cash-Flow methodology as well as the Multiples technique are applied. Finally, a Monte Carlo simulation is used to assess the risk that is associated with an investment in this particular asset. The DCF technique results in a fair value of 55.64 Euro per share. As of 1st of April the share traded below this value at a price of 44.80 Euro and thus a buy recommendation is issued. The multiples valuation leads to different results depending on the multiples applied, which can be explained by the unique position of OSRAM in the lighting market. To conclude, a comparison with an investment banks is conducted and disparities in the esti-mates and assumptions are examined.

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