Discounted Cash Flow Calculation for LSE:0QLU using Excess Returns Model Model
The calculations below outline how an intrinsic value for Basler Kantonalbank is arrived at using the Excess Return Model. This approach is used for finance firms where free cash flow is difficult to estimate.
In the Excess Return Model the value of a firm can be written as the sum of capital invested currently in the firm and the present value of excess returns that the firm expects to make in the future.
The model is sensitive to the Return on Equity of the company versus the Cost of Equity, how these are calculated is detailed below the main calculation.
The current share price of
is above its future cash flow value.
Often investors are willing to pay a
for a company that has a high dividend or the potential for future growth.
PRICE RELATIVE TO MARKET
We can also value a company based on what the stock market is willing to pay for
it. This is similar to the price of fruit (e.g. Mangoes or Avocados) increasing
when they are out of season, or how much your home is worth.
The amount the stock market is willing to pay for
is considered below, and whether this is a fair price.
Price based on past earnings
Basler Kantonalbank's earnings available for a low price, and how does
this compare to other companies in the same industry?
Basler Kantonalbank's earnings are expected to grow by 16.4% yearly, however this is not considered high growth (20% yearly).
Unable to determine if Basler Kantonalbank is high growth as no revenue estimate data is available.
Past and Future Earnings per Share
The accuracy of the analysts who estimate the future performance data can
be gauged below. We look back 3 years and see if they were any good at
predicting what actually occurred. We also show the highest and lowest estimates
looking forward to see if there is a wide range.
Basler Kantonalbank's performance over the past 5 years by checking for:
Has earnings increased in past 5 years? (1 check)
Has the earnings growth in the last year exceeded that of the
industry? (1 check)
Is the recent earnings growth over the last year higher than the average annual growth over the
past 5 years? (1 check)
Is the Return on Equity (ROE) higher than 20%? (1 check)
Is the Return on Assets (ROA) above industry average? (1 check)
Has the Return on Capital Employed (ROCE) increased from 3 years ago? (1 check)
The above checks will fail if the company has reported a loss in the most recent
earnings report. Some checks require at least 3 or 5 years worth of data.
has a total score of
2/6, see the detailed checks below.
Note: We use GAAP Net Income excluding extraordinary items in all our calculations.
Fundamentally a bank's business is based upon borrowing and lending money, for
this reason they typically have high levels of debt and we analyse them
This treemap shows a more detailed breakdown of
Basler Kantonalbank's finances. If any of them are yellow this
indicates they may be out of proportion and red means they relate to one of the
Liabilities and shares
The 'shares' portion represents any funds contributed by the owners (shareholders) and any profits.
Nearly all companies have debt. Debt in itself isn’t
however if the debt is too high, or the company can’t afford to pay the interest
on its debts this may have impacts in the future.
The graphic below shows equity (available funds) and debt, we ideally want to
see the red area (debt) decreasing.
If there is any debt we look at the companies capability to repay it, and
whether the level has increased over the past 5 years.
Management is one of the most important areas of a company. We look at
unreasonable CEO compensation, how long the team and board of directors have
been around for and insider trading.
TENURE AS CEO
Mr. Basil Heeb has been Chief Executive Officer, Head of President's Office and Chairman of Management Board since April 1, 2019. Mr. Heeb most recently served as chief operating officer and member of the executive committee of the SwissQuant Group in Zurich.
Insufficient data for Basil to compare compensation growth.
Insufficient data for Basil to establish whether their remuneration is reasonable compared to companies of similar size in United Kingdom of Great Britain and Northern Ireland.
Management Team Tenure
Average tenure and age of the
management team in years:
The average tenure for the Basler Kantonalbank management team is less than 2 years, this suggests a new team.
CEO, Chairman of Management Board and Head of President's Office
CFO, Head of Finance & Risk and Member of Management Board
Deputy CEO (ai)
Head of Service Center & Member of Executive Board
Chief Digital Officer
Head of Sales Department for Private Clients & Member of the Executive Board
Head of Legal & Compliance and Member of the Executive Board
Head of General Secretariat
Head of the Sales Development Department
Head of the Group Inspectorate
Board of Directors Tenure
Average tenure and age of the
board of directors in years:
The average tenure for the Basler Kantonalbank board of directors is less than 3 years, this suggests a new board.
Basler Kantonalbank provides various banking products and services to private and corporate customers in Switzerland. The company offers private, youth, education plus, seniors, Euro private and current, business, foreign currency, rent deposit, capital payment, and savings accounts; and various cards and payment terminals. It also provides mortgages and building loans; personal and collateral loans; lease, working capital, real estate, and female consult financing; investment capital funding; and bonds and bank credits. In addition, the company offers traveler's currency; pension and investment solutions; investment products; current market reports; sustainable investments; and mobile payment, e-banking, trading and stock exchange, financial planning, tax consultation, inheritance advisory, asset management, financial market analysis, and private banking services. Basler Kantonalbank was founded in 1899 and is headquartered in Basel, Switzerland.
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