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 114.70
| Method | Value per share | vs price |
|---|---|---|
| Peter Lynch (P/E = growth + yield)EPS × (0.0 + 9.6) | Rs 223.30 | +95% |
| Benjamin Graham (revised formula)EPS × (8.5 + 2 × 0.0) × 4.4 ÷ 11.0 | Rs 79.08 | −31% |
| Earnings DCF (5 years, exit P/E 7)discounted at 18.0% a year | Rs 107.54 | −6% |
Middle estimate Rs 107.54: the price is 7% above it. 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.