Discounted Cash Flow Calculation for LSE:0RJN using Excess Returns Model Model
The calculations below outline how an intrinsic value for Banco Comercial Português 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
Banco Comercial Português
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
Banco Comercial Português's
is considered below, and whether this is a fair price.
Price based on past earnings
Banco Comercial Português's earnings available for a low price, and how does
this compare to other companies in the same industry?
Banco Comercial Português's earnings are expected to grow significantly at over 20% yearly.
Banco Comercial Português's revenue is expected to grow by 14.4% 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.
Banco Comercial Português'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.
Banco Comercial Português
has a total score of
3/6, 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
Banco Comercial Português'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. Miguel Maya Dias Pinheiro is a Vice Chair of Administrative Council at Banco Millennium Atlântico, SA since 2018. Mr. Pinheiro had been Vice Chairman of BIM – Banco Internacional.
Positions held at Banco Comercial Português, SA:
Member of the Board of Directors since February 28, 2012, Chief Executive Officer since May 30, 2018, Vice Chairman and Member of Board for International Strategy.
Positions inside the BCP Group:
• Chairman of the Board of Directors of Interfundos – Gestão de Fundos de Investimento Imobiliário, SA Manager of BCP África, SGPS, Lda.
• Chairman of the Board of Directors of BCP Capital – Sociedade de Capital de Risco S.A.
• Vice-Chairman of the Board of Directors and of the Remunerations Commission of BIM – Banco Internacional de Moçambique, S.A.;
• Member of the Supervisory Board of Bank Millennium, S.A. (Poland).
Positions outside the BCP Group:
• Vice-Chairman of the Board of Directors of Banco Millennium Atlântico, S.A.
• Member of the Senior Board - Alumni Clube ISCTE.
Academic and Specialised Qualifications:
• Licentiate Degree in Corporate Organisation and Management from Instituto Superior das Ciências do Trabalho e da Empresa (ISCTE)
• Corporate Senior Management Programme (PADE) - AESE
• Advanced Management Programme – INSEAD.
Professional experience in the last 10 years relevant to the position:
• From August 2007 to November 2009 – Head of the Office of the Chairman of the Executive Board of Directors of Banco Comercial Português, S.A.
• From 11 November 2009 to 18 April 2011 - Member of the Executive Board of Directors of Banco Comercial Português, S.A.
• From December 2009 to May 2011 - Chairman of the Board of Directors of Banco ActivoBank, S.A.
• From 18 April 2011 to 28 February 2012 - Member of the Executive Board of Directors of Banco Comercial Português, S.A.
• From March to June 2012- Chairman of the Board of Directors of Banco de Investimento Imobiliário, S.A.
• From 23 April 2012 to 15 June 2015 - Member of the Board of Directors of Banco Millennium Angola, S.A.
• From 15 June 2012 to 16 June 2015 - Member of the Supervisory Board of Portugal Capital Ventures - Sociedade de Capital de Risco S.A., in representation of Banco Comercial Português, S.A.
Miguel Maya's compensation has been consistent with company performance over the past year.
Miguel Maya's remuneration is lower than average for companies of similar size in United Kingdom of Great Britain and Northern Ireland.
Miguel Maya Pinheiro
Miguel de Pereira de Braganca
CFO & Director
José Iglésias Soares
Chief Operating Officer
Bernardo Roquette de Aragão de Collaço
Market Relations Representative & Head of the IR Division
Mário António Gaspar Neves
Group Head of Compliance
Rui da Silva Teixeira
Head of Audit Division
João de Oliveira Jorge Palma
Ana dos Santos de Pina Cabral
Board of Directors Tenure
Average tenure and age of the
Banco Comercial Português
board of directors in years:
The tenure for the Banco Comercial Português board of directors is about average.
Board of Directors
Nuno da Silva Amado
Chairman of Board & Member of Board for International Strategy
Valter Dias de Barros
Jorge Baptista Magalhães Correia
Vice Chairman & Member of Remuneration and Welfare Board
Banco Comercial Português, S.A., together with its subsidiaries, provides various banking and financial products and services. It operates through Retail Banking; Companies, Corporate & Investment Banking; Private Banking; Non Core Business Portfolio; Foreign Business; and Other segments. The company offers a range of financial products and services, including current accounts, payment systems, savings and investment products, and private banking services; and asset management and investment banking services, such as mortgage loans, consumer credit, commercial banking, leasing, factoring and insurance, and others, as well as personal, mortgage, and automobile loans. It also provides various cards; cash advance and online statements; investment services in stocks, certificates, warrants, bonds, and funds; and health, house, car, personal accident and travel, and pets insurance solutions, as well as life reinsurance, real estate investment fund, trust, and pension services. In addition, the company offers venture capital, real-estate management, videotext, brokerage, consulting, and investment fund management services. Further, it provides term investment and financial insurance products; and treasury, real estate, international, and Internet and mobile banking services. It provides its banking products and services under the Millennium brand. As of December 31, 2017, the company operated 578 branches in Portugal; and 542 branches internationally. Banco Comercial Português, S.A. was founded in 1985 and is based in Porto, Portugal.
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