Værdiansættelse af Bang & Olufsen A/S

Anders Villars Jørgensen

Student thesis: Master thesis

Abstract

Bang & Olufsen A/S has experienced a significant decrease in the stockvalue in recent years. The purpose of the thesis is to estimate the stockvalue of Bang & Olufsen A/S. The result of the theisis should clarify whether or not the stock is a good investment. The valuation is based on three steps. The first step being a strategic analysis, which focuses on analyzing the micro and macro environment, the industry and the company. The second step conducts a financial analysis of the historical performance and risk of the company. The third and final step consolidates the findings from the strategic and financial analysis into a forecast and valutation part. The strategic analysis showed a big drop in sales due to the financial crisis, which has had a big impact on the last couple of year’s bad performance. Alongside B&O hasn't been able to reduce cost at the same rate as sales. As a result of the bad performance B&O hired a new CEO Tue Mantoni and he has introduced a brand new strategy with a main focus on boosting sales, reducing costs and increasing efficiency. With the new strategy B&O looks to be back on the right track, but now they need to perform in other to fulfill the strategy and meet the potential of B&O. Two valuation methods have been used. A present value model and a number of relative valuation models. The present value approach indicates a stock value of 112,54 kr. which corresponds to a potential gain of 104,62 %. These estimates are based on three different scenarios; neutral, pessimistic and optimistic. The result has been weigthed in accordance with their estimated probability. The valuation using the relative models shows that B&O is relatively expensive compared to its peer group. Only a few of the multiples shows that other companies in the peer group are more expensive than B&O. The end result howewer depends on which multiples are used for the valuation. This spread indicates that there might be other companies in the peer-group that would be a better investment compared to B&O. The value estimated by the present value model is assessed as the correct approach valuing B&O. It is therefore concluded that the stock is underrated compared to the current stockvalue of 55 kroner, therefore I rate it as a good investment.

EducationsMSc in Finance and Accounting, (Graduate Programme) Final Thesis
LanguageDanish
Publication date2012
Number of pages107