Question
In: Finance
The Price is Right! Utilizing 1 of these public companies—Target, Coke, Pepsi, Wal-Mart, or J. P....
The Price is Right! Utilizing 1 of these public companies—Target, Coke, Pepsi, Wal-Mart, or J. P. Morgan—determine the right price for that company’s stock in the following 5 easy steps: Visit this Web site. Type in your selected company’s name in the Quote Search box, and select your company's stock symbol. Jot down the current stock price. Select the Analysis tab, and find the Analyst Recommendation box. Jot down the stock’s Earnings Per Share (EPS) Estimate. Select the Price Ratios tab, and jot down the current Price to Earnings Ratio (P/E) for the industry (not the company). Using the PE valuation model to determine the right price for this stock, multiply the industry average P/E ratio by the stock’s EPS to estimate the intrinsic price of the stock. Answer the following questions: Is this stock overvalued or undervalued when compared to the current stock price? What are the analysts’ recommendations for this stock (buy, sell, or hold)? Do you agree with them? Would you consider purchasing this stock? Why?
Solutions
Expert Solution
| Particulars | In USD | |||||||||
| Pepsico (PEP) | 136.73 | |||||||||
| EPS (20190 | 5.52 | |||||||||
| Current PE Ratio | 24.77 | |||||||||
| Industry PE Ratio (Soft Beverages | 20.16 | |||||||||
| http://pages.stern.nyu.edu/~adamodar/New_Home_Page/datafile/pedata.html | ||||||||||
| Current share price should be : Industry PE Ratio * Trailing EPS of the company | ||||||||||
| Should be Price | = | 111.2832 | ||||||||
| By Using the industry PE, Company is looking overvalued | ||||||||||
| Comments : Company can be looking overvalued due to people have more faith in its future ability | ||||||||||
| Recommendation by Analysts : Hold this stock, because it will grow further in future and provide abnormal returns | ||||||||||
| https://markets.businessinsider.com/analyst/pep/hold | ||||||||||
jeff jeffy answered 4 months agoRelated Solutions
The Price is Right! Utilizing 1 of these public companies—Target, Coke, Pepsi, Wal-Mart, or J. P....
The Price is Right!
Utilizing 1 of these public companies—Target, Coke, Pepsi,
Wal-Mart, or J. P. Morgan—determine the right price for that
company’s stock in the following 5 easy steps:
Visit this Web site.
Type in your selected company’s name in the Quote Search box,
and select your company's stock symbol. Jot down the current stock
price.
Select the Analysis tab, and find the Analyst Recommendation
box. Jot down the stock’s Earnings Per Share (EPS) Estimate.
Select the Price Ratios...
Selected financial data of Target and Wal-Mart for 2017 are below (in millions). Target Wal-Mart Income...
Selected financial data of Target and Wal-Mart for 2017 are
below (in millions).
Target
Wal-Mart
Income Statement Data for Year
Net sales
$65,357
$408,214
Cost of goods sold
45,583
304,657
Selling and administrative expenses
15,101
79,607
Interest expense
707
2,065
Other income (expense)
(94)
(411)
Income tax expense
1,384
7,139
Net income
$ 2,488
$ 14,335
Balance Sheet Data (End of Year)
Current assets
$18,424
$ 48,331
Noncurrent assets
26,109
122,375
Total assets
$44,533
$170,706
Current liabilities
$11,327
$ 55,561...
What has Wal-Mart done well (and differently) than other companies like Target, K-Mart, Sears?
What has Wal-Mart done well (and differently) than other
companies like Target, K-Mart, Sears?
according to the Marketability ratios for Target and Wal-Mart write a summary on the comparison of...
according to the Marketability ratios for Target and Wal-Mart
write a summary on the comparison of their Marketability ratios
Target: Market to Book: -30.24, PE Ratio: $14.80 , Dividend Yield:
0.090 Walmart: Market to Book: -17.07, PE: 40.86, Dividend Yield:
0.001
Suppose selected financial data of Target and Wal-Mart for 2020 are presented here (in millions). Target...
Suppose selected financial data of Target and Wal-Mart for 2020 are presented here (in millions). Income Statement Data for YearTarget CorporationWal-Mart Stores, Inc.Net sales$65,357$408,214Cost of goods sold45,583304,657Selling and administrative expenses15,10179,607Interest expense7072,065Other income (expense)(94)(411)Income tax expense1,3847,139Net income$2,488$14,335Balance Sheet Data (End ofYear)Current assets$18,424$48,331Noncurrent assets26,109122,375Total assets$44,533$170,706Current liabilities$11,327$55,561Long-term debt17,85944,089Total stockholders' equity15,34771,056(b) Compare the liquidity, solvency, and profitability of the two companies.
Selected hypothetical financial data of Target and Wal-Mart for 2022 are presented here (in millions). Target...
Selected hypothetical financial data of Target
and Wal-Mart for 2022 are presented here (in
millions).
Target
Corporation
Wal-Mart
Stores, Inc.
Income Statement Data for Year
Net sales
$65,600
$410,000
Cost of goods sold
44,000
308,000
Selling and administrative expenses
14,600
75,000
Interest expense
690
2,100
Other income (expense)
(90
)
(420
)
Income tax expense
1,400
7,300
Net income
$ 4,820
$ 17,180
Balance Sheet Data
(End of Year)
Current assets
$17,000
$48,000
Noncurrent assets
26,700
120,000
Total assets
$43,700...
Suppose selected financial data of Target and Wal-Mart for 2020 are presented here (in millions). Target...
Suppose selected financial data of Target and
Wal-Mart for 2020 are presented here (in
millions).
Target
Corporation
Wal-Mart
Stores, Inc.
Income Statement Data for Year
Net sales
$65,357
$408,214
Cost of goods sold
45,583
304,657
Selling and administrative
expenses
15,101
79,607
Interest expense
707
2,065
Other income (expense)
(94)
(411)
Income tax expense
1,384
7,139
Net income
$ 2,488
$ 14,335
Balance Sheet Data (End of Year)
Current assets
$18,424
$48,331
Noncurrent assets
26,109
122,375
Total assets
$44,533
$170,706
Current...
Suppose selected financial data of Target and Wal-Mart for 2017 are presented here (in millions). Target...
Suppose selected financial data of Target and
Wal-Mart for 2017 are presented here (in
millions).
Target
Corporation
Wal-Mart
Stores, Inc.
Income Statement Data for Year
Net sales
$64,900
$405,000
Cost of goods sold
44,000
300,000
Selling and administrative expenses
14,000
75,000
Interest expense
650
1,800
Other income (expense)
(70
)
(380
)
Income tax expense
1,300
6,500
Net income
$ 4,880
$ 21,320
Balance Sheet Data
(End of Year)
Current assets
$16,000
$45,000
Noncurrent assets
25,000
120,000
Total assets
$41,000...
Suppose selected financial data of Target and Wal-Mart for 2017 are presented here (in millions). Target...
Suppose selected financial data of Target and
Wal-Mart for 2017 are presented here (in
millions).
Target
Corporation
Wal-Mart
Stores, Inc.
Income Statement Data for Year
Net sales
$66,400
$414,000
Cost of goods sold
45,000
302,000
Selling and administrative expenses
15,500
81,000
Interest expense
650
1,900
Other income (expense)
(80
)
(400
)
Income tax expense
1,400
7,300
Net income
$ 3,770
$ 21,400
Balance Sheet Data
(End of Year)
Current assets
$17,000
$47,000
Noncurrent assets
26,700
120,000
Total assets
$43,700...
Suppose selected financial data of Target and Wal-Mart for 2020 are presented here (in millions). Target...
Suppose selected financial data of Target and
Wal-Mart for 2020 are presented here (in
millions).
Target
Corporation
Wal-Mart
Stores, Inc.
Income Statement Data for Year
Net sales
$65,357
$408,214
Cost of goods sold
45,583
304,657
Selling and administrative expenses
15,101
79,607
Interest expense
707
2,065
Other income (expense)
(94)
(411)
Income tax expense
1,384
7,139
Net income
$ 2,488
$ 14,335
Balance Sheet Data (End of Year)
Current assets
$18,424
$48,331
Noncurrent assets
26,109
122,375
Total assets
$44,533
$170,706
Current...
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