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A Valuation of PT XYZ (Persero) Tbk

Natasya Kristina, Isrochmani Murtaqi


Abstract. The number of airplane user increased year by year that makes airlines industry can be considered as a profitable business. PT XYZ is quite strong because of their achievement and even being the one of the best airlines in the world, but its share price continues to decline and even in 2017 XYZ generated negative earnings. This research aims to estimate the intrinsic value per share of XYZ as a comparison value to the share price and to determine whether the share price is overvalued or undervalued using FCFF method. The result is intrinsic value of XYZ is IDR 378 and it is lower that the market share price which is IDR 404. This research also aims to determine whether the share price of XYZ is underpriced or overpriced compared to its competitors. XYZ’s PBV is lower than its competitors; this means that XYZ is underpriced. Based on historical data, XYZ in 2017 has negative retained earnings which means they have cumulative loss from the previous year. Because of this deficit, investors would not have the courage to set a high price for XYZ, and this causes XYZ to have a low share price in stock market.

Keywords: Airlines Industry, Valuation, Free Cash Flow to The Firm, Relative Valuation


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