Two Part Question
The Price is Right!
Utilizing 1 of these public companiesâTarget, Coke,Pepsi, Wal-Mart, or J. P. Morganâdetermine the right price for thatcompanyâs stock in the following 5 easy steps:
Visit this Web site.
Type in your selected companyâs name in the QuoteSearch box, and select your company's stock symbol. Jot down thecurrent stock price.
Select the Analysis tab, and find the AnalystRecommendation box. Jot down the stockâs Earnings Per Share (EPS)Estimate.
Select the Price Ratios tab, and jot down the currentPrice to Earnings Ratio (P/E) for the industry (not thecompany).
Using the PE valuation model to determine the rightprice for this stock, multiply the industry average P/E ratioby the stockâs EPS to estimate the intrinsic price of thestock.
Answer the following questions:
Is this stock overvalued or undervalued when comparedto the current stock price?
What are the analystsâ recommendations for this stock(buy, sell, or hold)?
Do you agree with them? Would you consider purchasingthis stock? Why?
Two Part Question
The Price is Right!
Utilizing 1 of these public companiesâTarget, Coke,Pepsi, Wal-Mart, or J. P. Morganâdetermine the right price for thatcompanyâs stock in the following 5 easy steps:
Visit this Web site.
Type in your selected companyâs name in the QuoteSearch box, and select your company's stock symbol. Jot down thecurrent stock price.
Select the Analysis tab, and find the AnalystRecommendation box. Jot down the stockâs Earnings Per Share (EPS)Estimate.
Select the Price Ratios tab, and jot down the currentPrice to Earnings Ratio (P/E) for the industry (not thecompany).
Using the PE valuation model to determine the rightprice for this stock, multiply the industry average P/E ratioby the stockâs EPS to estimate the intrinsic price of thestock.
Answer the following questions:
Is this stock overvalued or undervalued when comparedto the current stock price?
What are the analystsâ recommendations for this stock(buy, sell, or hold)?
Do you agree with them? Would you consider purchasingthis stock? Why?
