Valuation Summary
To arrive at a price target for Mailpac, we utilized a Justified Price to Earnings (P/E) Model with our estimated forward earnings for the company. Our estimate for the 2023 Financial year-end eps amounted to $0.12, which took into account the continued lower demand for ecommerce in the near term. To arrive at a discount rate, we utilized the capital asset pricing model to arrive at a discount rate of 12.90%. We calculated the company’s sustainable growth rate arriving at an outturn of 7.26%. This long-term growth rate resulted in the company having a justified P/E ratio of 17.73x, giving us a price target of $2.20. The company currently trades at a multiple of 16.08x and with our expected eps output for FY 2023, the company trades at a forward P/E of 15.58x. With consideration to the expected return along with other factors stated above, we recommend investors MARKETWEIGHT MAILPAC.
| Stock | MAILPAC |
|---|---|
| Current Price | J$1.93 |
| 52 Week High | J$3.21 |
| 52 Week Low | $J.60 |
| YTD Return | -4.46% |
| Estimated Fair Value | J$2.20 |
| Potential Return | 13.75% |
| Trailing P/E | 16.08x |
| Trailing P/B | 8.35x |
| Forward P/E | 15.58x |
| Recommendation | MARKETWEIGHT |
as at April 26, 2023
Mailpac Group Limited | Equity Analysis
