Informative content from Ishmohit @Worldlywiseinvestors and on time once more. Kudos! However, I would contradict the valuation estimates. I would rate the exit PB in 2027 to be as follows (CAGR estimates are derived from his own modelling sheet):
- Bull case: 3.8 (last 5-Year median PB) = 28% CAGR (Inc Dividends)
- Base case: 3.1 (mean of bull and bear case) = 19% CAGR (Inc Dividends)
- Bear case: 2.5 (lowest ever PB) = 11% CAGR (Inc Dividends)
This seems to be the most reasonable assumption set to me.
Because even if we assume that the current concern of a large base post-merger persists and the stock suffers a long-term derating, I don’t see it slipping down below the 2.5 mark indefinitely. But from that same line of thinking, I also feel that investors should taper their expectations and may need to settle in somewhere between the bear and the base case. I would love to hear opposing POVs on this.
Disc - Invested and biased
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