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I would get the idea of there being 'no transferable skills' out of your head - the modeling skills developed in these groups are still great to conceptualize and learn how companies evaluate their financials and performance. You'll also pick up on the excel skills required to build a robust model (laying out the inputs, linking sheets, coloring, etc.) and beyond that it is not difficult to model a 'normal' EBITDA company
Generally specialized modeling groups: - FIG (banks, insurance, etc.) - O&G (more so upstream and midstream I believe) - Power and Utilities - Real Estate - Pharma - Mining - Restructuring
That said within each of these industries you will have a ton of 'normal' companies that provide services/products/etc. that will be modeled on a standard EBITDA basis
Curious to know how you see pharma as a different way of modeling it? SOTP of every drug?
I totally understand that understanding basic financial statement and metric are transferable. I guess I just didn't word my question correctly. I had the same question regarding power and utilities, real estate, pharma and mining about how they are sector specific modeling. Especially with power and utilities / real estate, they seem to be just simple spreadsheet business IMO. Maybe someone can shed some light on the type of modeling that's done in those industries.
P&U modeling varies a lot depending largely on the regulatory regime. For example in some states like California the utility regulator sets the return on capital for utilities in the state and you build a rate base model to arrive at the price of electricity ultimately authorized. (The income statement is more or less constructed backwards starting from permitted net income and ending with allowed revenue). You also might model a more traditional company, or something really random like a solar or hydro generation plant. It’s more complicated than that and rate setting proceedings/regulations vary a lot among jurisdictions but suffice to say you are exposed to a broad variety of modeling paradigms.
Is this some what similar to municipal financing? Where the biggest difference is that muni is more credit metric focus and debt financing.
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