Valuation Summary
To arrive at our price target for JMMBGL, a Justified Price to Earnings (P/E) Model was used. Our estimate for the 2023 Financial year-end eps, considering the growth in the first quarter of the financial year and seasonality of earnings amounted to $5.95. To arrive at a discount rate, we utilized the capital asset pricing model (CAPM), which resulted in an outturn of 12.73%. The long- term growth rate was estimated at 3.28%, taking into consideration factors including the company’s profit margin, leverage and asset utilization. Using these inputs, a justified P/E ratio of 10.59x was derived, resulting in a price target of $63.03, representing a 54.60% upside from the last closing price of $40.77. The company currently trades at a trailing P/E multiple of 6.30x, far behind the average of 10.83x for other large diversified financial groups listed on the stock exchange. The company based on its current trading price along with our target EPS produces a forward P/E of 6.85x. Given the factors above, we recommend investors OVERWEIGHT JMMBGL in their portfolio.
| Stock | JMMBGL |
|---|---|
| Last Closing Price | J$40.77 |
| 52 Week High | J$61.24 |
| 52 Week Low | J$34.25 |
| YTD Return | 3.37% |
| Target Price | J$63.03 |
| Potential Return | 54.60% |
| Trailing P/E | 6.30x |
| Trailing P/B | 1.57x |
| Forward P/E | 6.85x |
| Dividend Yield (TTM) | 2.08% |
| Total Return | 56.68% |
| Recommendation | OVERWEIGHT |
As at September 6, 2022
JMMB Group Limited | Equity Analysis
