Valuation of Dia and food retail industry overview

• Autor(a) principal: Valério, Rita Maria Pessoa de Carvalho
• Data de Publicação: 2017
• Tipo de documento: Dissertação
• Idioma: eng
• Título da fonte: Repositório Científico de Acesso Aberto de Portugal (Repositórios Cientìficos)
• Texto Completo: http://hdl.handle.net/10071/15311
• topic: DIA; Food retail sector; Discounted cash flow; Multiples; Avaliação de empresas; Comércio alimentar; Venda a retalho; Investimento financeiro; Espanha

The present report has two main goals, the first one is to analyze the food retail sector and the second one is evaluating Distribuidora Internacional de Alimentación Group, in order to make an investment recommendation. The company is a Spanish organization with presence in five countries in three different continents. DIA operates in the food retail sector and has seven different banners. In recent years, the company opened new stores through franchising business model and acquired some competitor companies. Company shares quote on Madrid Stock Exchange and integrate the IBEX 35 index, as well as the European index Stoxx 600. With the purpose of understanding if the company is being over or underpriced by the market, we make a company analysis and estimate the key variables, in order to perform an evaluation using the Discounted Cash Flow (DCF) and Market Multiples Methods. The final goal is to achieve a price target and make an investment recommendation on DIA’s shares. All these analyses are made with data available from 2011 until 2016. The projections are for the next three years - 2017, 2018 and 2019. Our price target is €5.98 which compares to the market value of € 4.67, as of 30th December 2016. So, according to this analysis the investment recommendation is BUY DIA’s shares.