Equity valuation: CTT - Correios de Portugal, S.A.
Autor(a) principal: | |
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Data de Publicação: | 2021 |
Tipo de documento: | Dissertação |
Idioma: | eng |
Título da fonte: | Repositório Científico de Acesso Aberto de Portugal (Repositórios Cientìficos) |
Texto Completo: | http://hdl.handle.net/10071/24336 |
Resumo: | Equity valuation has always been a subject of interest for companies, stakeholders and corporate finance specialists. The purpose of this Master in Finance project is to valuate CTT - Correios de Portugal, S.A. (from now on referred to as only CTT), a Portuguese company listed on Euronext Lisbon and one of the biggest in the country. Although its main operation, which largely consists of postal services, has been facing difficulties in the form of revenue and volume decreases, the innovation through e-commerce, investment in parcels and specially CTT Bank and financial services, have been propelling CTT to a stable growth, maintaining its importance in this sector of the Portuguese economy. As part of the valuation process, the end goal for this work is to assess if CTT’s shares were under or overvalued and, consequently, issue a recommendation on the action to take regarding them. To do this, the method chosen was the discounted cash flow model, namely the firm valuation approach (free cash flows to the firm), which is later complemented by another approach, relative valuation. The share price of CTT was subsequently computed and subject to a sensitivity analysis in order to better understand its possible variations. Through the application of the free cash flows to the firm methodology, CTT target price per share, as of 31st December 2020, was estimated to be of €4.25. Given that the share closed at €2.35 on 31st December 2020, it is concluded that it was undervalued, hence a buy recommendation is suggested. |
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Equity valuation: CTT - Correios de Portugal, S.A.CTT - Correios de Portugal, S.A.Company valuationDCF Discounted Cash Flow --Free cash flows to the firmRelative valuationCorporate financeAvaliação de empresas -- Business valuationFinanças empresariaisEquity valuation has always been a subject of interest for companies, stakeholders and corporate finance specialists. The purpose of this Master in Finance project is to valuate CTT - Correios de Portugal, S.A. (from now on referred to as only CTT), a Portuguese company listed on Euronext Lisbon and one of the biggest in the country. Although its main operation, which largely consists of postal services, has been facing difficulties in the form of revenue and volume decreases, the innovation through e-commerce, investment in parcels and specially CTT Bank and financial services, have been propelling CTT to a stable growth, maintaining its importance in this sector of the Portuguese economy. As part of the valuation process, the end goal for this work is to assess if CTT’s shares were under or overvalued and, consequently, issue a recommendation on the action to take regarding them. To do this, the method chosen was the discounted cash flow model, namely the firm valuation approach (free cash flows to the firm), which is later complemented by another approach, relative valuation. The share price of CTT was subsequently computed and subject to a sensitivity analysis in order to better understand its possible variations. Through the application of the free cash flows to the firm methodology, CTT target price per share, as of 31st December 2020, was estimated to be of €4.25. Given that the share closed at €2.35 on 31st December 2020, it is concluded that it was undervalued, hence a buy recommendation is suggested.A avaliação de empresas sempre foi um tema de grande interesse para as próprias, stakeholders e especialistas da área. O objetivo do presente projeto de Mestrado em Finanças é avaliar os CTT - Correios de Portugal, S.A. (apenas CTT daqui em diante), uma empresa portuguesa cotada na Euronext Lisbon e uma das maiores do país. Embora a sua principal operação, maioritariamente assente em serviços postais, tenha enfrentado dificuldades como a diminuição de receitas e volumes, a inovação através do ecommerce, o investimento em encomendas e principalmente os resultados do Banco CTT, têm impulsionado o grupo para um crescimento estável, mantendo a sua importância neste setor da economia portuguesa. No âmbito do processo de avaliação, o objetivo deste trabalho é avaliar os CTT, nomeadamente se a sua ação se encontra sub ou sobrevalorizada e, consequentemente, emitir uma recomendação sobre a decisão a tomar relativamente à mesma. Para tal, optou-se por utilizar a abordagem dos fluxos de caixa descontados (através do método dos fluxos de caixa livres), que é posteriormente complementada por uma avaliação relativa. O preço da ação dos CTT foi calculado e submetido a uma análise de sensibilidade, com vista a compreender de melhor forma as suas possíveis variações. Através da aplicação do primeiro método, o preço alvo por ação dos CTT a 31 de dezembro de 2020 foi estimado em 4,25€. Atendendo a que a ação fechou em 2,35€ a 31 de dezembro de 2020, conclui-se que esta se encontrava subavaliada, pelo que se recomenda a compra da mesma.2022-01-26T15:41:44Z2021-12-21T00:00:00Z2021-12-212021-10info:eu-repo/semantics/publishedVersioninfo:eu-repo/semantics/masterThesisapplication/pdfhttp://hdl.handle.net/10071/24336TID:202886700engBrás, Ivo Gonçalo Venturainfo:eu-repo/semantics/openAccessreponame:Repositório Científico de Acesso Aberto de Portugal (Repositórios Cientìficos)instname:Agência para a Sociedade do Conhecimento (UMIC) - FCT - Sociedade da Informaçãoinstacron:RCAAP2023-11-09T17:57:19Zoai:repositorio.iscte-iul.pt:10071/24336Portal AgregadorONGhttps://www.rcaap.pt/oai/openaireopendoar:71602024-03-19T22:29:33.999698Repositório Científico de Acesso Aberto de Portugal (Repositórios Cientìficos) - Agência para a Sociedade do Conhecimento (UMIC) - FCT - Sociedade da Informaçãofalse |
dc.title.none.fl_str_mv |
Equity valuation: CTT - Correios de Portugal, S.A. |
title |
Equity valuation: CTT - Correios de Portugal, S.A. |
spellingShingle |
Equity valuation: CTT - Correios de Portugal, S.A. Brás, Ivo Gonçalo Ventura CTT - Correios de Portugal, S.A. Company valuation DCF Discounted Cash Flow -- Free cash flows to the firm Relative valuation Corporate finance Avaliação de empresas -- Business valuation Finanças empresariais |
title_short |
Equity valuation: CTT - Correios de Portugal, S.A. |
title_full |
Equity valuation: CTT - Correios de Portugal, S.A. |
title_fullStr |
Equity valuation: CTT - Correios de Portugal, S.A. |
title_full_unstemmed |
Equity valuation: CTT - Correios de Portugal, S.A. |
title_sort |
Equity valuation: CTT - Correios de Portugal, S.A. |
author |
Brás, Ivo Gonçalo Ventura |
author_facet |
Brás, Ivo Gonçalo Ventura |
author_role |
author |
dc.contributor.author.fl_str_mv |
Brás, Ivo Gonçalo Ventura |
dc.subject.por.fl_str_mv |
CTT - Correios de Portugal, S.A. Company valuation DCF Discounted Cash Flow -- Free cash flows to the firm Relative valuation Corporate finance Avaliação de empresas -- Business valuation Finanças empresariais |
topic |
CTT - Correios de Portugal, S.A. Company valuation DCF Discounted Cash Flow -- Free cash flows to the firm Relative valuation Corporate finance Avaliação de empresas -- Business valuation Finanças empresariais |
description |
Equity valuation has always been a subject of interest for companies, stakeholders and corporate finance specialists. The purpose of this Master in Finance project is to valuate CTT - Correios de Portugal, S.A. (from now on referred to as only CTT), a Portuguese company listed on Euronext Lisbon and one of the biggest in the country. Although its main operation, which largely consists of postal services, has been facing difficulties in the form of revenue and volume decreases, the innovation through e-commerce, investment in parcels and specially CTT Bank and financial services, have been propelling CTT to a stable growth, maintaining its importance in this sector of the Portuguese economy. As part of the valuation process, the end goal for this work is to assess if CTT’s shares were under or overvalued and, consequently, issue a recommendation on the action to take regarding them. To do this, the method chosen was the discounted cash flow model, namely the firm valuation approach (free cash flows to the firm), which is later complemented by another approach, relative valuation. The share price of CTT was subsequently computed and subject to a sensitivity analysis in order to better understand its possible variations. Through the application of the free cash flows to the firm methodology, CTT target price per share, as of 31st December 2020, was estimated to be of €4.25. Given that the share closed at €2.35 on 31st December 2020, it is concluded that it was undervalued, hence a buy recommendation is suggested. |
publishDate |
2021 |
dc.date.none.fl_str_mv |
2021-12-21T00:00:00Z 2021-12-21 2021-10 2022-01-26T15:41:44Z |
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info:eu-repo/semantics/publishedVersion |
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info:eu-repo/semantics/masterThesis |
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http://hdl.handle.net/10071/24336 TID:202886700 |
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