Equity research in the funeral industry: invocare valuation

• Autor(a) principal: Costa, Diogo Henriques De Almeida e
• 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/10362/122618
• topic: Equity research; Funeral industry; Invocare; Valuation; Domínio/Área Científica::Ciências Sociais::Economia e Gestão

This work project “Equity Research in the Funeral Industry–Invocare Valuation” analyses Invocare financials to determine a fair value for its stock among the funeral industry. Due to a strong M&A activity over the past years and with the recent investment made through their NBO program, invocare was able to become a market leader in the afterlife services in Australia. Over 2020the firm acquired two competitors in the pet cremations segment, becoming market leader in this segment too. Given the current pandemic crisis, Invocare’s profit will be impacted in 2020 and 2021, and we estimate that recover to start in 2022, returning to pre-crisis values. Nevertheless, we predict a continuous market growth as the number of deaths is expected to increase in the foreseeable future. This will result in a terminal growth of 0.6%.Our valuation for Invocare yields a price target of A$13.44 forFY21, which results in a 19.97% total shareholder return and hence, a BUY recommendation.