11.10.2014 Views

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

SHOW MORE
SHOW LESS

You also want an ePaper? Increase the reach of your titles

YUMPU automatically turns print PDFs into web optimized ePapers that Google loves.

<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

Hooray! Your file is uploaded and ready to be published.

Saved successfully!

Ooh no, something went wrong!