Publicação
The intricacies of valuing non-publicly traded credit institutions : an equity research on CGD
| Resumo: | This report was done to find the market value of the Bank “Caixa Geral de Depósitos” (CGD), one of the biggest banks in Portugal and a leader in market shares in commercial and investment banking. The current micro and macroeconomic tendencies were analyzed and predicted the future using coherent assumptions. This report also addresses the differences between evaluating private companies and evaluating those listed on a stock exchange. Considering the main model of this paper, the Flow To Equity, CGD’s market price was forecasted to be €13.4 per outstanding share at the end of 2025. This prediction suggests that the company is undervalued compared to the average values from the different models used: the Dividend Discount Model, the Multiples Valuation, and the Excess Returns Model. It’s important to mention that this recommendation has a medium risk. The valuation is supported by the CGD’s resilience as its capital ratios have significant buffers well above the minimum required by the banking regulatory entities. Moreover, its dominant position in the Portuguese banking sector as one of the biggest banks and the increasing efficiency in its daily operations have enabled CGD to pay consistent dividends to its only shareholder, the Portuguese state. This report is aligned with the guidelines established by the CFA Institute. |
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| Autores principais: | Gírio, João Pedro Madeira |
| Assunto: | Equity Research Valuation Mergers & Acquisitions Banking Caixa Geral de Depósitos Equity Research Avaliação de Empresas não Cotadas em Bolsa Fusões e Aquisições Caixa Geral de Depósitos Banca |
| Ano: | 2024 |
| País: | Portugal |
| Tipo de documento: | dissertação de mestrado |
| Tipo de acesso: | acesso aberto |
| Instituição associada: | Universidade de Lisboa |
| Idioma: | português |
| Origem: | Repositório da Universidade de Lisboa |
| Resumo: | This report was done to find the market value of the Bank “Caixa Geral de Depósitos” (CGD), one of the biggest banks in Portugal and a leader in market shares in commercial and investment banking. The current micro and macroeconomic tendencies were analyzed and predicted the future using coherent assumptions. This report also addresses the differences between evaluating private companies and evaluating those listed on a stock exchange. Considering the main model of this paper, the Flow To Equity, CGD’s market price was forecasted to be €13.4 per outstanding share at the end of 2025. This prediction suggests that the company is undervalued compared to the average values from the different models used: the Dividend Discount Model, the Multiples Valuation, and the Excess Returns Model. It’s important to mention that this recommendation has a medium risk. The valuation is supported by the CGD’s resilience as its capital ratios have significant buffers well above the minimum required by the banking regulatory entities. Moreover, its dominant position in the Portuguese banking sector as one of the biggest banks and the increasing efficiency in its daily operations have enabled CGD to pay consistent dividends to its only shareholder, the Portuguese state. This report is aligned with the guidelines established by the CFA Institute. |
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