Despite its use is so widespread in practice, relative valuation finds a limited space in the literature devoted to company valuation. Market multiples are increasingly used by banks and equity analysts to estimate the value of the companies, based on the assumption that market prices are able to provide the best approximation of it. Yet this valuation method is not codified so in-depth as its wide use would suggest. Beside textbooks, the major contributions on the use of market multiples in firm valuation come from empirical researches, even if they often analyse various aspects of the topic and, in some cases, they contrasting conclusions. If the studies devoted to relative valuation are in a limited number, even fewer those who consider the distinction between cyclical and non-cyclical companies. My research is focused on a sample of listed companies, mainly European, and employs the most widely used market multiples, both asset side and equity side. My study aims to analyse, in the context of cyclical companies valuation, the use of multiples based on one year forecasts of the fundamental value drivers. It is also measured the efficiency of the approach applied, distinguishing between cyclical and non-cyclical companies and comparing the results obtained with the ones relative to previous empirical researches. The attention is also placed on the procedures used to compute the benchmark multiples of comparable companies, by investigating if the chosen methods bring different levels of estimation accuracy.
Nonostante il suo vasto impiego nella pratica, la valutazione relativa trova uno spazio limitato nella letteratura dedicata alla valutazione di impresa. I multipli di mercato sono sempre più utilizzati da banche e analisti azionari per stimare il valore delle imprese, basandosi sull’ipotesi che i prezzi di mercato siano in grado di fornire la migliore approssimazione. Tale metodologia, però, non è codificata in modo così approfondito come il suo vasto uso farebbe pensare. Accanto ai manuali, maggiori contributi sull’uso dei multipli di mercato nella valutazione di impresa sono forniti da ricerche empiriche, anche se spesso analizzano aspetti diversi del problema e in alcuni casi raggiungono pareri discordanti. Se gli studi dedicati alla valutazione relativa sono in numero limitato, ancora meno quelli che considerano la distinzione tra imprese cicliche e non cicliche. La mia ricerca è focalizzata su un insieme di società quotate prevalentemente europee e impiega i multipli di mercato più usati, sia asset side sia equity side. Lo studio mira ad analizzare, nell’ambito della valutazione di imprese cicliche, l’utilizzo di multipli di mercato basati su previsioni di un anno in avanti dei driver di valore fondamentali. Viene misurata l’efficienza dell’approccio applicato, distinguendo tra imprese cicliche e non cicliche e comparando i risultati ottenuti con quelli relativi a ricerche empiriche precedenti. Viene posta l’attenzione anche sul metodo utilizzato per calcolare i multipli di riferimento delle imprese comparabili, investigando sui diversi livelli di accuratezza nella stima che il metodo scelto porta al processo valutativo.
RELATIVE VALUATION USING MARKET MULTIPLES
PAPASODARO, ARIANNA
2017/2018
Abstract
Despite its use is so widespread in practice, relative valuation finds a limited space in the literature devoted to company valuation. Market multiples are increasingly used by banks and equity analysts to estimate the value of the companies, based on the assumption that market prices are able to provide the best approximation of it. Yet this valuation method is not codified so in-depth as its wide use would suggest. Beside textbooks, the major contributions on the use of market multiples in firm valuation come from empirical researches, even if they often analyse various aspects of the topic and, in some cases, they contrasting conclusions. If the studies devoted to relative valuation are in a limited number, even fewer those who consider the distinction between cyclical and non-cyclical companies. My research is focused on a sample of listed companies, mainly European, and employs the most widely used market multiples, both asset side and equity side. My study aims to analyse, in the context of cyclical companies valuation, the use of multiples based on one year forecasts of the fundamental value drivers. It is also measured the efficiency of the approach applied, distinguishing between cyclical and non-cyclical companies and comparing the results obtained with the ones relative to previous empirical researches. The attention is also placed on the procedures used to compute the benchmark multiples of comparable companies, by investigating if the chosen methods bring different levels of estimation accuracy.È consentito all'utente scaricare e condividere i documenti disponibili a testo pieno in UNITESI UNIPV nel rispetto della licenza Creative Commons del tipo CC BY NC ND.
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https://hdl.handle.net/20.500.14239/5185