Discounted Cash Flow Calculation for LSE:0QNU using Excess Returns Model Model
The calculations below outline how an intrinsic value for Luzerner 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
Luzerner Kantonalbank's earnings available for a low price, and how does
this compare to other companies in the same industry?
Luzerner Kantonalbank's earnings are expected to grow by 11.1% yearly, however this is not considered high growth (20% yearly).
Luzerner Kantonalbank's revenue is expected to grow by 2% yearly, however this is not considered high growth (20% yearly).
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.
Luzerner 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
Luzerner 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. Daniel Salzmann has been Chief Executive Officer at Luzerner Kantonalbank AG since July 2014 and has been its Member of Executive Board since 2004. Mr. Salzmann serves as Head of Presidential Department at Luzerner Kantonalbank AG. Mr. Salzmann served as Head of Chief Executive Officer Office at Luzerner Kantonalbank AG since July 2014. Mr. Salzmann served as Interim Chief Executive Officer of Luzerner Kantonalbank AG since January 2014. He served as Head of Individual & Commercial Customers Department and Head of Retail Banking at Luzerner Kantonalbank AG. He served as Deputy Chief Executive Officer of Luzerner Kantonalbank AG. Mr. Salzmann served as Director of Accounting/Controlling of Ascom Telematic AG, since 1990 to 1993. Mr. Salzmann served as Director, Private and Commercial Customers Department of Luzerner Kantonalbank. Since 1993, he held several management positions in retail banking at the former SBG (today UBS) and at CS. He has been Member of the Management Board at Luzerner Kantonalbank, since 2004 and Bank Coop. since 2003. He served as Board of Directors of Parcom Systems AG. He served as Member of the Business Committee of AGI-Kooperation. Mr. Salzmann served as Foundation Board of the Foundation Konzerthaus, Lucerne. Mr. Salzmann holds Executive MBA from the School of Economics, Lucerne in 1996 and Advanced Executive Program from Kellogg School of Management, Evanston/Chicago (USA) in 2002.
Insufficient data for Daniel to compare compensation growth.
Insufficient data for Daniel 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 Luzerner Kantonalbank management team is over 5 years, this suggests they are a seasoned and experienced team.
CEO, Head of Presidential Department & Member of Executive Board
CFO, Head of Department Finance & Computer Science and Member of Executive Board
Head of Department Market Services & Member of Executive Board
Head of Corporate Clients & Private Banking and Member of Executive Board
Head of Department Private & Business Customers and Member of Executive Board
Daniel von Arx
Head of Communications
Head of Corporate Clients Segment - Lucerne
Head of Real Estate Services
Head of Cash Management Services
Head of Import & Export Finance - Corporate Clients
Board of Directors Tenure
Average tenure and age of the
board of directors in years:
The average tenure for the Luzerner Kantonalbank board of directors is less than 3 years, this suggests a new board.
Luzerner Kantonalbank AG provides banking products and services in Switzerland. It offers finance planning and investment management services; portfolio management; and investment advice, securities trading, derivatives, Lombard loans, documentary credits, collections, and guarantees. The company also provides payment, consultancy, and advisory services. It serves private customers, as well as small and medium-sized enterprises through a network of 26 branches. The company was formerly known as Kantonale Spar-und Leihkasse and changed its name to Luzerner Kantonalbank AG in 1892. Luzerner Kantonalbank AG was founded in 1850 and is based in Lucerne, Switzerland.
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