Unilever Group : equity valuation

• Autor(a) principal: Pires, Susana Sofia Castelo
• Data de Publicação: 2014
• Tipo de documento: Dissertação
• Idioma: eng
• Título da fonte: Repositório Científico de Acesso Aberto de Portugal (Repositórios Cientìficos)
• Texto Completo: http://hdl.handle.net/10400.14/16592
• topic: Domínio/Área Científica::Ciências Sociais::Economia e Gestão

The following dissertation has the purpose to value the Unilever Group, but more specifically Unilever N.V. being publicly traded in the Amsterdam Exchange Index. Unilever is seen as a global player and one of most successful and competitive fast-moving consumer goods companies. In order to valuate Unilever’s equity, a Discounted Cash Flow (DCF) approach is first carried out, since it is believed to be the most reliable methodology. The value estimated was €36.39, advising one to buy its shares when comparing to the actual price of € 31.86. Further on, a relative valuation (selecting a specific peer group and applying multiples) is suggested, as a complementary analysis to the DCF, leading to a target price of €34.15 using a forward enterprise-value multiple for 2014. Meaning, once again, a buy recommendation is issued, since the market currently yields a lower value. As a final assessment and basing the target price on the present value of future dividends, a Dividend Discount Model (DDM) is performed. This model indicates Unilever’s is priced at €18.65, leading to an overvalued market price and, consequently, a selling opportunity. Lastly, a comparison is made between these results and the target price reached by a JP Morgan’s analyst, being the last one priced at €27.00 using a DCF-WACC methodology (representing a selling opportunity). All details are further addressed in this Thesis.