Estimate samsung electronic price

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Reference no: EM132478393

Sasha McGowan is an equity analyst at ABI Asset Management. Sasha has been asked by her investment committee to estimate Samsung Electronic's price in 12 months. Sasha has access to the following data:

a. EPS estimate for 2020 = $9.50

b. Current Price = $270

c. P/E range for the last five years: 12x to 19x

d. Annual Dividend = $3

e. Earnings Growth Rate = 3%

f. Beta = 0.9

g. Expected Market Rate = 7%

h. Risk-free rate = 0.8%

Sasha can also use the below fundamental information that she has collected from various sources:

  • The company has seen its tablet sales grow slow down by 20%
  • The company has experienced 40% growth in Galaxy sales
  • The company has recently launched two new product categories: Samsung payments and Sports Watch.

Find a range of price estimates that Sasha would calculate for Samsung's stock price in 12 months. Justify the range. If Sasha has to identify a "target price", what price would she assign as the target price?

Reference no: EM132478393

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