Lasco Distributors Limited Equity Report

Valuation Summary

The Price to Book (P/B). Price to Earnings (P/E) and Dividend Discount Model (DDM) Valuation methods were applied to our forecasted Last Price (J$) Earnings and Book Value for FY 2022 to derive an estimate of fair value.

Our forecast for FY 2021 considers the ongoing uncertainty related to COVID-19 and the implications for the general macroeconomy.

Our base case forecast for LASD is that they will earn approximately J$978 million in FY 2022, which translates to an estimated Earnings Per Share of J$0.28. We expect book value to increase in FY 2022 to J$6.49 billion with an estimated book value per share of J$1.85. Utilizing the justified P/B and justified P/E of 1.85X and 18.11X, we estimate the Company’s a range of fair values of between J$3.89 and J$5.05, respectively. We complemented this with a DDM model and obtained a fair value estimate of J$3.34. Utilizing the average of the three valuation methods, our estimate of fair value is J$4.09. Comparing the estimate of fair value to the current price of J$3.15, the stock is undervalued by 31.53%. Therefore, Barita Investments Limited’s recommendation on this stock is OVERWEIGHT

Last Price (J$) 3.15
Year to Date Return -2.13%
Dividend Yield 1.63%
Price/Book 1.72
Forward P/E 11.29
Estimated Fair Value $4.09
Estimated Shareholder Return Upside 31.53%
Recommendation Overweight

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