Ação e Reação published an analysis about NATURA (NATU3) that uses a 4 to 5 percent growth in perpetuity.
The intelligent Investors knows that tweaking the long term growth rate can lead to ANY value projection you want. The effect gets even stronger when the rate of growth used is close to the discount rate. The value estimative can even be infinite if the growth rate in perpetuity is larger than the discount rate.
For public utility or strongly regulated companies, like Eletropaulo, Comgas, ALL, etc, I use a 2% growth rate in perpetuity. For other companies like Fras-Le, Randon, Weg, Cielo, Banco do Brasil, etc, I use 3%.
Efeitos no Brasil do cenário financeiro nos EUA
3 weeks ago
1 comments:
The target price calculated leaves a P/E of 45 for NATU3! That's nonsense!
The same site also makes a calculation for WEGE3 that results in current P/E of 32!
Definitly that's not value investment, he is paying for growth.
Both are, no doubts, nice, beautiful companies, but at the current valuation are terrible investments.
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