Equity Valuation in R
Cliff Ang
Senior Vice President, Compass Lexecon
Steps in determining the Implied Price
Relative valuation generates an Implied Price
What is the value of a midcap financial firm with BVPS of $30?
finl <- subset(midcap400, gics_sector == "Financials")
finl$p_bv <- ifelse(finl$bvps < 0, NA, finl$price / finl$bvps)
finl <- finl[complete.cases(finl), ]
avg_p_b <- mean(finl$p_bv) avg_p_b
2.688627
bvps <- 30
implied_price <- avg_p_b * bvps
implied_price
80.65881
Equity Valuation in R