Lasco Manufacturers Limited Equity Report

Valuation Summary

The Price to Book (P/B) and Dividend Discount Model (DDM) Valuation methods were applied to our forecasted Earnings and Book Value for FY 2022 to estimate the stock’s fair value. Our base case forecast for LASM is that they will earn approximately J$1.47 billion in FY 2022, which translates to an estimated Earnings Per Share of J$0.36. We expect book value to increase FY 2022 to J$8.70 billion with an estimated book value per share of J$2.12.

Utilizing the justified P/B of 2.79x, we estimate the Company’s fair value to J$5.91. We complemented this with a DDM and obtained a fair value estimate of J$3.49. Utilizing the average of the two-valuation methodology, we obtained a fair value of J$4.70, comparing this to the current price of J$3.45; the stock is currently undervalued by 37.90%. Therefore, we rate this stock as an OVERWEIGHT.

List Price (J$) $3.45
Year to Date Return -25.37%
Dividend Yield 1.73%
Price/Book 1.72
Forward P/B 1.63
Estimated Fair Value $4.70
Total Return Upside 37.90%
Recommendation OVERWEIGHT

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