Close Brothers Seydler Research AG - BVB Aktie - Borussia Dortmund
Close Brothers Seydler Research AG - BVB Aktie - Borussia Dortmund
Close Brothers Seydler Research AG - BVB Aktie - Borussia Dortmund
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<strong>Borussia</strong> <strong>Dortmund</strong> GmbH & CO KGaA<br />
Valuation<br />
Valuation summary<br />
We applied multiple valuation approaches to derive the company´s fair value. While<br />
the DCF valuation can appropriately indicate very well the long-term growth<br />
potential of a company our indicated market multiples give more insights about the<br />
current market momentum. We focused on the multiples for 2013/2014E to<br />
2014/2015E on details, in order to have more certainty in considering the estimates<br />
for the market sentiment and for the long-term with our DCF valuation.<br />
Overall, our valuation is based on the following two main assumptions:<br />
• Due to the very specific business model of <strong>BVB</strong> focussing on football, it is<br />
not difficult to find adequate companies whose business models are a<br />
‘perfect match’ to the one of <strong>BVB</strong>. However, given that most of the<br />
European football clubs which are listed do not have any public estimates<br />
it is quite difficult to compare the financial targets of these clubs.<br />
Therefore, we decided to evaluate the multiples of the company with just<br />
three football clubs (Manchester United, Juventus Turn, Olympique Lyon)<br />
and add Madison Square garden company which is a pure entertainment<br />
company. The selection of these four peers allowed us including a<br />
standard peer-group valuation.<br />
Peer group consists of<br />
mostly pure football<br />
clubs and one<br />
entertainment<br />
company<br />
• A DCF model can appropriately indicate organic and external growth. As a<br />
result of the new success level of <strong>BVB</strong> the outlook becomes more<br />
attractive (tendency: improving financial figures) and margins which are<br />
not yet fully accountable (and priced in) will be seen in mid-term.<br />
•<br />
Consolidation of the valuation method<br />
DCF can appropriately<br />
indicate the growth<br />
potential of <strong>BVB</strong><br />
Weighting<br />
factor<br />
Fair value<br />
per share (EUR)<br />
Market multiple valuation 30.0% 3.59<br />
DCF valuation 70.0% 5.73<br />
Fair value per share (EUR) 5.09<br />
Price target per share (EUR) 5.00<br />
Source: CBS <strong>Research</strong> <strong>AG</strong><br />
Our DCF model results in a fair value of EUR 5.73 per share and our market<br />
valuation indicated a fair value per share of EUR 3.59 (including a discount of<br />
20%), corresponding to a weighted (DCF 70% / Peer Group 30%) fair value per<br />
share of EUR 5.09. We start our coverage with a BUY recommendation and a<br />
price target of EUR 5.00 per share.<br />
Fair value at EUR 5.09<br />
BUY recommendation<br />
with PT of EUR 5.00<br />
We think that <strong>BVB</strong>´s share moved into focus of many investors resulting from the<br />
positive development of the team over the last two to three years. Additionally, the<br />
upcoming Champions League finale with a two German teams (FC Bayern against<br />
<strong>BVB</strong>) is a tremendous support both for the brand awareness as well as the share<br />
attention. Overall, our assumption is that the company will continue the achieved<br />
growth momentum over the next years as well, which is not reflected in the current<br />
share price yet and illustrates the ~60% upside potential to our price target.<br />
www.cbseydlerresearch.ag <strong>Close</strong> <strong>Brothers</strong> <strong>Seydler</strong> <strong>Research</strong> <strong>AG</strong> | 7