Relative Valuing Best Buy

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Relative Valuation According to Aswath Damodaran, relative valuation is the most widely used technique in sell side research at investment banks. Relative valuation is the concept of using multiples and comparing the value of an asset to a similar asset in the market. Purchasing a house uses concepts of relative valuation. Houses are priced by comparing other houses that have similar specification within the same neighborhood. In this section I will be valuing Best Buy using a historical relative valuation, ranking model using solver analysis, and pricing Best Buy’s equity share price by discounting the PV sum of 5 years of dividends and applying a target P/E to my earnings per share forecast in 2020 to find the terminal value. Historical Relative Valuation…show more content…
I will be using the S&P 500 as the overall market and Conns and GameStop will be Best Buy’s competitors used to determine valuation multiples of trading cheap or
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