| Resumo: | The following dissertation contains an equity valuation of Daimler AG, a German Automotive producer which operates worldwide and is most well-known by its luxury car division – Mercedes-Benz. The firm’s industrial business is also comprised by the trucks, vans and buses divisions. Finally, its fifth division, Daimler Financial Services, provides support to the industrial business divisions’ customers providing financial services. To start, we elaborate on the present state of the art of equity valuation and then we select the most suitable method to value Daimler AG, having reviewed the current macroeconomic environment, the industry and the company itself. Taking into account that the firm has a financial services division whose core business differs substantially from the industrial business divisions, we have decided to value Daimler AG using a Sum of Parts approach – which uses a Discounted Cash Flow method with Weighted Average Cost of Capital for the industrial business and a variety of traditional and non-traditional methods to value Daimler Financial Services. Based on the financial model we have developed, we recommend investors to buy Daimler AG equity, which we valued at EUR 81.05 on 29th December 2017. To support our findings, we valued the firm using a selection of multiples applied the Dividend Discount Model, performed a sensitivity analysis, observed the historical implied volatility of the European automotive sector companies and, finally, compared our valuation to Socgen’s.
|
|---|