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| UBS is a preeminent global financial advisory and solutions provider, catering to private, institutional, and corporate clients across the world, with a particular emphasis on Swiss private clients. With a widespread presence in major financial centers, our recent integration with Credit Suisse enhances our capabilities, offering clients elevated value, a broader spectrum of services, and an extended global reach, reaffirming UBS's role as a driver of financial achievement.<ref>https://www.ubs.com/global/en/our-firm/what-we-do.html</ref> | | UBS is a preeminent global financial advisory and solutions provider, catering to private, institutional, and corporate clients across the world, with a particular emphasis on Swiss private clients. With a widespread presence in major financial centers, our recent integration with Credit Suisse enhances our capabilities, offering clients elevated value, a broader spectrum of services, and an extended global reach, reaffirming UBS's role as a driver of financial achievement.<ref>https://www.ubs.com/global/en/our-firm/what-we-do.html</ref> |
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| Considering UBS Group AG's strategic trajectory and integrated assumptions, our analysis envisions a potential 53.5% return over five years, correlating to an average annual growth rate of about 10.7%. This projects a £100,000 investment in UBS potentially growing to around £153,500 within five years, considering the foreseen upside. These insights amalgamate Stockhub user perspectives, our detailed DCF model, and current market valuation.
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| == Operations == | | == Operations == |
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| == Markets == | | == Markets == |
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| === Total Addressable Market ===
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| Total Addressable Market: Here, the total addressable market (TAM) is defined as the global financial services market, and based on a number of assumptions, it is estimated that the size of the market, in terms of revenue, is $28.1 trillion.<ref>https://www.thebusinessresearchcompany.com/report/financial-services-global-market-report</ref>
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| === Serviceable Available Market ===
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| Serviceable Available Market: Here, the serviceable available market (SAM) is defined as the global commercial banking market, and based on a number of assumptions, it is estimated that the size of the market, in terms of revenue, is $2.8 trillion.<ref>https://www.ibisworld.com/global/market-size/global-commercial-banks/</ref>
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| === Serviceable Obtainable Market ===
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| Serviceable Obtainable Market: Here, the serviceable obtainable market (SOM) is defined as the US commercial banking market, and based on a number of assumptions, it is estimated that the size of the market, in terms of revenue, is $1.1 trillion.<ref>https://www.ibisworld.com/industry-statistics/market-size/commercial-banking-united-states/</ref>
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| == Competition == | | == Competition == |
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| UBS Group AG's financial performance exhibited stability over the years, with modest revenue fluctuations and steady net income growth. Despite the dynamic economic landscape, the company's revenue remained above $30 billion from 2019 to 2022. This consistent growth suggests effective management strategies. Further analysis of factors influencing these trends would provide a more comprehensive understanding. | | UBS Group AG's financial performance exhibited stability over the years, with modest revenue fluctuations and steady net income growth. Despite the dynamic economic landscape, the company's revenue remained above $30 billion from 2019 to 2022. This consistent growth suggests effective management strategies. Further analysis of factors influencing these trends would provide a more comprehensive understanding. |
| [[File:Financials UBS.png|center|thumb|500x500px]] | | [[File:Financials UBS.png|center|thumb|500x500px]] |
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| == Valuation == | | == Valuation == |
| ===What's the Current Value of UBS Group AG?===
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| As of August 23rd, 2023, UBS Group AG shares have attained a value of $23.73, reflecting a steady path of recuperation subsequent to the effects of the Covid-19 pandemic. This optimistic momentum underscores UBS Group AG's tenacity and capacity for expansion.
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| {| class="wikitable"
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| ! colspan="4" |Airbus Current Valuation - August 2023
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| |-
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| |Share Price (@09/08)
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| |[$]
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| |'''23.73'''
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| |-
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| |Shares Outstanding
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| |[#B]
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| |3.23
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| |-
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| |Equity Value
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| |[$B]
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| |76.65
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| |-
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| |Add:
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| Net Debt at Dec. 31, 2022
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| |[$B]
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| |17.1
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| |-
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| |'''Enterprise Value'''
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| |[$B]
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| |59.5
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| |}In our analysis of Airbus's valuation, we employed two distinct methods:
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| *'''Discounted Cashflow''': By employing the perpetuity growth approach, we ascertain that UBS Group AG's implied share price stands at '''$36.43'''. Consequently, this yields an approximated upside potential of '''53.5%'''.
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| *'''Trading Comps''': In light of our calculations based on the comps analysis, where the Price-to-Earnings (P/E) ratio indicates an estimated value of '''$15.93''', it's apparent that UBS Group AG's current stock value of $23.73 suggests a potential '''overvaluation''' in comparison to our projected valuation ranges.
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| ===What's the expected return of an Investment in the Company?===
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| Selecting the DCF valuation approach over the alternative methods, and considering an approximate upside potential of '''53.5%''' over a span of 5 years, projections based on Stockhub users' analysis suggest that an investment in UBS Group AG holds the potential for a significant return over the next five years, with an annual return of approximately 10.7%. To simplify, an initial £1,000 investment in UBS could potentially grow to around £1,535.00 in five years, taking into account the estimated upside.
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| When an investment attains its projected return of 53.5%, which corresponds to an annual return of about '''10.7%''' over the five-year period, it becomes a favorable choice for considering investment in the company.
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| == Monte-Carlo Simulations == | | == Monte-Carlo Simulations == |
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| |18,121,000 | | |18,121,000 |
| |} | | |} |
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| === Disocunted Cash Flow (DCF) ===
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| Outlined below is the Discounted Cash Flow (DCF) analysis for UBS Group AG. The computations have been performed using Bloomberg Terminal.
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| '''Assumptions:'''
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| * Revenue Growth Rate: 0%
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| * Operating Margin: 28.87%
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| * Tax Rate: 21%
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| * Discount Rate (WACC): 8.19%
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| * Terminal Growth Rate: 2%
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|
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| ==== Forecast Period: 5 years Calculate ====
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|
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| ==== Free Cash Flows (FCF) ====
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| {| class="wikitable"
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| !Year
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| !Revenue
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| !Operating Income
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| !EBT
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| !Taxes
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| !NOPAT
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| !Depreciation & Amortization
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| !Operating Cash Flow
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| !CAPEX
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| !Working Capital Changes
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| !Free Cash Flow
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| |-
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| |2022
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| |$33,270,000,000
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| |$9,609,369,900
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| |$9,609,369,900
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| |$2,018,167,879
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| |$7,591,202,021
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| |$2,061,000,000
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| |$9,652,202,021
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| | -$1,643,000,000
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| |$18,228,000,000
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| |$29,237,202,021
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| |-
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| |2023
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| |$33,270,000,000
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| |$9,609,369,900
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| |$9,609,369,900
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| |$2,018,167,879
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| |$7,591,202,021
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| |$2,061,000,000
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| |$9,652,202,021
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| | -$1,643,000,000
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| |$18,228,000,000
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| |$29,237,202,021
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| |-
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| |2024
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| |$33,270,000,000
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| |$9,609,369,900
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| |$9,609,369,900
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| |$2,018,167,879
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| |$7,591,202,021
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| |$2,061,000,000
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| |$9,652,202,021
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| | -$1,643,000,000
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| |$18,228,000,000
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| |$29,237,202,021
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| |-
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| |2025
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| |$33,270,000,000
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| |$9,609,369,900
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| |$9,609,369,900
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| |$2,018,167,879
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| |$7,591,202,021
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| |$2,061,000,000
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| |$9,652,202,021
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| | -$1,643,000,000
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| |$18,228,000,000
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| |$29,237,202,021
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| |-
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| |2026
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| |$33,270,000,000
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| |$9,609,369,900
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| |$9,609,369,900
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| |$2,018,167,879
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| |$7,591,202,021
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| |$2,061,000,000
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| |$9,652,202,021
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| | -$1,643,000,000
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| |$18,228,000,000
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| |$29,237,202,021
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| |}
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|
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| ==== Discount Cash Flows ====
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| {| class="wikitable"
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| !Year
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| !FCF
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| !PV Factor
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| !Discounted FCF
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| |-
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| |2022
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| |$29,237,202,021
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| |0.9252
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| |$27,024,994,009
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| |-
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| |2023
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| |$29,237,202,021
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| |0.8526
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| |$24,907,452,724
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| |-
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| |2024
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| |$29,237,202,021
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| |0.7844
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| |$22,962,979,085
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| |-
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| |2025
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| |$29,237,202,021
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| |0.7202
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| |$20,927,732,983
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| |-
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| |2026
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| |$29,237,202,021
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| |0.6597
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| |$19,313,711,550
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| |-
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| |TV
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| |$493,077,739,961
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| |0.6597
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| |$325,224,847,288
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| |}
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|
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| ==== Calculation Results ====
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| {| class="wikitable"
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| !Calculation Results
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| !Values
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| |-
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| |Equity Value
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| |$311,028,340,331
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| |-
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| |Per Share Value
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| |$36.43
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| |-
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| |Current Stock Value
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| |$23.73
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| |-
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| !Upside
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| |'''53.5%'''
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| |}
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|
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| ==== Sensitivity analysis ====
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| {| class="wikitable"
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| ! colspan="2" rowspan="2" |Sensitivity Analysis
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| ! colspan="7" |Perpetuity Growth Rate
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| |-
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| |0.20%
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| |0.70%
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| |1.20%
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| |1.70%
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| |2.20%
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| |2.70%
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| |3.20%
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| |-
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| ! rowspan="6" |WACC
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| |7.0%
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| |$33.77
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| |$34.60
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| |$35.46
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| |$36.37
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| |$37.33
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| |$38.34
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| |$39.41
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| |-
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| |7.5%
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| |$32.98
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| |$33.70
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| |$34.46
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| |$35.27
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| |$36.13
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| |$37.04
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| |$38.00
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| |-
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| |8.0%
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| |$32.24
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| |$32.83
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| |$33.47
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| |$34.16
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| |$34.89
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| |$35.68
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| |$36.51
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| |-
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| |8.5%
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| |$31.55
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| |$32.01
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| |$32.52
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| |$33.08
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| |$33.70
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| |$34.37
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| |$35.10
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| |-
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| |9.0%
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| |$30.90
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| |$31.26
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| |$31.67
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| |$32.12
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| |$32.63
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| |$33.18
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| |$33.79
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| |-
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| |9.5%
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| |$30.28
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| |$30.55
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| |$30.87
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| |$31.24
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| |$31.66
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| |$32.13
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| |$32.67
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| |}
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|
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| === Trading comparables (Comps) ===
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| {| class="wikitable"
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| !P/E Ratio
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| !Estimated EPS
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| !Estimated Share Price
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| |-
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| |Low (4.62x)
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| |1.96
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| |$9.06
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| |-
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| |Median (8.13x)
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| |1.96
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| |'''$15.93'''
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| |-
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| |Mean (8.79x)
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| |1.96
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| |$17.22
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| |-
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| |High (10.28x)
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| |1.96
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| |$20.14
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| |}
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| == References ==
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| __INDEX__ | | __INDEX__ |
| <references /> | | <references /> |