Fair value calculator
Three classic ways to put a value on a share, filled in with each company's latest EPS, growth and dividend yield. Change any assumption and watch the answer move.
Share
Price now Rs 315.91
| Method | Value per share | vs price |
|---|---|---|
| Peter Lynch (P/E = growth + yield)EPS × (25.0 + 3.8) | Rs 1,622.88 | +414% |
| Benjamin Graham (revised formula)EPS × (8.5 + 2 × 25.0) × 4.4 ÷ 11.0 | Rs 1,318.59 | +317% |
| Earnings DCF (5 years, exit P/E 7)discounted at 18.0% a year | Rs 694.20 | +120% |
Middle estimate Rs 1,318.59: a 76% margin of safety at today's price. Change any input to see how sensitive the answer is.
Formulas are textbook yardsticks, not price targets. Small changes in growth or rates move the answer a lot. Not investment advice.
The three methods
Peter Lynch. A fairly priced company trades at a P/E about equal to its earnings growth rate plus its dividend yield. A company growing 15% a year with a 5% yield would be fair at about 20 times earnings.
Benjamin Graham. His revised formula, from The Intelligent Investor: value = EPS × (8.5 + 2 × growth) × 4.4 ÷ the current high-grade bond yield. 8.5 is the P/E he gave a company with no growth; 4.4 was the bond yield of his day. With Pakistan's higher rates, enter today's T-bill or PIB yield.
Earnings DCF. EPS grows at your rate for the years you choose, you collect the share of profit paid as dividends, and you sell at the P/E you expect. Each rupee is discounted back at your required return.
All three lean on the growth figure. Last year's growth is a starting point only; it rarely repeats.