Comparing Equity Research Reports
Hi. I'm quite new here and have a very fundamental question.There is a stock I am interested to study and find that different analysts have given target price. Now I am confused how to interpret these target prices. In short, I have two equity research reports from 2 analysts, seems both have used DCF analysis but have absolutely different target prices.How should I compare them ? How do I understand why they have difference in their analysis-what factors should I be looking into ?
Look to see basic things, WACC rate, growth rate, whether they have the same source of data (do fcf corroborate). Also, if you have access to investext, check out intiating coverage reports. Those are much more thorough in detail for their thesis and valuation. And honestly, ER reports, take them with a grain of salt. Do your own research and come up with your own valuation (comps help), and only use ER reports for validation and to see if u made small mistakes anywhere.
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