Onni_Maiha:
Wait a minute. Tekova’s report beat Inderes’ profitability estimate as well as EBIT and EPS clearly (again). The analyst raises the EPS forecasts for this year and next year by a cent. The analyst raises the required rate of return due to rising interest rates. WACC rises by 0.5%. With the new 11.8% WACC, the DCF model indicates €1.60. The target price is lowered from €1.30 → €1.20.
Is this increase in the required rate of return due to rising interest rates company-specific, sector-specific, or does it apply to all companies? The analysis might give the impression that the target price is just chasing a falling share price, and they didn’t want to give a buy recommendation for a company whose investor sentiment is very sour, even though purely based on the numbers they should have.
This doesn’t strictly belong in the Tekova thread, but Inde’s target price is the analyst’s guess of what the share price might be in 12 months, not what it should be or what the company’s value is. At least that’s how Olli Vilppo answered when I asked about it.
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