How do I use multiples for stock pitches?

Hello everyone,

I will have my final round SA interview (ER) this week, and currently prepare for stock pitches.

One thing I wanna ask to you guys is about expected EPS and EBITDA.

As far as I know, if you use PE or EV/EBITDA for stock valuation, you would have to know expected EPS and EBITDA values (ex. 2015e EPS or 2015e EBITDA).

So, your TP might be "2015e EPS x your PE multiple".

I can pick my PE multiple like industry average. However, how can I get 2015e EPS or EBITDA?

Do I need to build a full earnings model for a company?

I think I won't have time to explain my model line by line during interview....

Can I use consensus 2015e EPS and EBITDA for my stock pitch purpose?

Many thanks in advance!!!

 

Sorry for confusion. Bloomberg provides the consensus for 2015e EPS or EBITDA on EEO page. If I use multiple method for valuation, can I use those numbers, instead of building earnings model, forecasting IS/BS/CF and finally calculating 2015e EPS and EBITDA by myself?

 
Best Response
taek1990:

Sorry for confusion.
Bloomberg provides the consensus for 2015e EPS or EBITDA on EEO page.
If I use multiple method for valuation, can I use those numbers, instead of building earnings model, forecasting IS/BS/CF and finally calculating 2015e EPS and EBITDA by myself?

His point is if you're going to use consensus (i.e., the values that the stock is currently prices of off) how are you going to find undervalued opportunities. And frankly, if you're just going to use consensus, what "work" are you actually doing?
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