Valuation & Recommendation
To arrive at our price target for MASSY, a combination of a Justified Price-to- Earnings (P/E) model and a Relative P/E was used. Our estimate for the 2023 Financial year-end EPS, considering the year-over-year growth in sales and net profit margin seen through the current period of the 2023 financial year amounted to $9.79. To arrive at a discount rate, we utilized the capital asset pricing model (CAPM), which resulted in an outturn of 13.93%. The long- term growth rate was estimated at 6.76%, taking into consideration factors including the company’s profit margin, leverage, and asset utilization.
Using these inputs, a justified P/E ratio of 13.95x was derived, resulting in a price target of $136.65, representing an upside of 35.29% from the last closing price of $101. Lastly, we determined a peer average P/E of conglomerates listed on the Main Market of 9.70x, which when applied to our forward EPS resulted in a price target of $95 a 5.95% downside from the last closing price. We then took the average of these results as our final target price, resulting in a target of $115.82, 14.67% above the current stock price. Our previous target was based on slightly lower expectations for revenue and net income growth following the results of the first quarter of FY 2023, resulting in a price target of $106.83. The company currently trades at a trailing P/E multiple of 10.02x. The company based on its current market price along with our target EPS produces a forward P/E of 10.31x. Additionally Massy
| Stock | Massy |
|---|---|
| Last Closing Price | J$101.00 |
| 52 Week High | J$105.00 |
| 52 Week Low | J$74.00 |
| YTD Return | 26.30% |
| Target Price | J$115.82 |
| Potential Return | 14.67% |
| Trailing P/E | 10.02x |
| Trailing P/B | 1.16x |
| Forward P/E | 10.31x |
| Dividend Yield (TTM) | 3.58% |
| Total Projected Return | 18.26% |
| Recommendation | OVERWEIGHT |
Massy Holdings Limited | Equity Analysis
