Use the price multiples to value JBH.
a) Select comparable companies for JBH from the Excel table available on iLearn. There are no limits on the number of comparable companies selected.
b) Explain why you choose those companies as comparable companies for JBH. What is the similarity between the comparable companies and JBH?
c) Calculate Earnings per Share (Actual) for the comparable companies.
d) Calculate Price to Earnings (Actual) and Price to Earnings (FY1) ratios for the comparable companies.
e) Apply the price multiples to value JBH, using both Price to Earnings (Actual) and Price to Earnings (FY1) ratios. Note that you have calculated EPS (Actual) and EPS (FY1) for JBH.
f) Target price for JBH is about $45-55. If your share value estimate using the price multiples valuation is far more or less than this range, explain what causes the difference.
g) Explain why using the price multiple valuation is problematic.