Discounted Cash Flow Calculation for LSE:0RTY using Excess Returns Model Model
The calculations below outline how an intrinsic value for Piraeus Bank 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
Piraeus Bank's earnings available for a low price, and how does
this compare to other companies in the same industry?
Piraeus Bank's earnings are expected to grow by 5.2% yearly, however this is not considered high growth (20% yearly).
Piraeus Bank's revenue is expected to grow by 10% 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.
Piraeus Bank'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
1/6, see the detailed checks below.
Note: We use GAAP Net Income excluding extraordinary items in all our calculations.
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
Christos I. Megalou is a senior international banker with over 30 years of experience in management, banking and finance, investment banking, mergers and acquisitions and capital markets. Mr. Megalou is currently the Founder and Managing Director of Tite Capital Limited, a private financial consultancy company based in London. He is also an Associate of Eilon Associates, an independent corporate finance advisory firm. Since 2016, he has been a Distinguished Fellow of the Global Federation of Competitiveness Councils in Washington, D.C. From 2013 to 2015, Mr. Megalou was Chief Executive Officer and Chairman of the Executive Board of Eurobank Ergasias SA, one of the four Systemic banks in Greece. From 2010 to 2013, Mr. Megalou served as Chairman of the Hellenic Bankers Association in the United Kingdom. From 1997 to 2013, he was Vice-Chairman of Southern Europe, Co-head of Investment Banking for Southern Europe and Managing Director in the Investment Banking Division of Credit Suisse in London. From 1991 to 1997, he was a Director at Barclays de Zoete Wedd. He is a member of the Board of Directors of Safe Bulkers Inc., a New York Stock Exchange listed externally-managed provider of marine drybulk transportation services, transporting bulk cargoes along worldwide shipping routes. He received a Bachelor of Science in Economics from the University of Athens and holds a Master of Business Administration in Finance from Aston University in Birmingham, United Kingdom.
Insufficient data for Chris to compare compensation growth.
Insufficient data for Chris 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 of the
management team in years:
The tenure for the Piraeus Bank management team is about average.
MD & Executive Director
GM & Group CFO
Executive GM & Group COO
General Director of Corporate Governance & Administration and Group General Counsel
Chief Transformation Officer & Advisor to Management
Deputy MD & Executive Director
Head of Group Risk Management
Head of Internal Audit Division
Deputy Chief Financial Officer
Board of Directors Tenure
Average tenure and age of the
board of directors in years:
The average tenure for the Piraeus Bank board of directors is less than 3 years, this suggests a new board.
Board of Directors
Chairman of the Board
MD & Executive Director
Karel De Boeck
Executive Director & Executive GM of Piraeus Legacy Unit
Piraeus Bank S.A., together with its subsidiaries, provides banking products and services in Europe. The company’s Retail Banking segment offers deposits, loans, working capital, imports-exports, letters of guarantee, etc. to retail customers and small-medium companies. Its Corporate Banking segment provides deposits, loans, syndicated loans, project financing, working capital, imports – exports, letters of guarantees, etc. to large and maritime companies. Its Investment Banking segment offers investment and advisory, underwriting and public listings, stock exchange services, etc. Its Asset Management and Treasury segment provides wealth and mutual funds management, and treasury services. Its Other segment engages in the real estate, IT activities, etc. It also offers debt securities issue, finance and operating leases, corporate factoring, city link areas and property management, call center, construction, rent and management of real estate, land and property development, and tourism and development services. In addition, the company develops/manages industrial areas; and assesses and collects commercial debts, as well as engages in venture capital fund and yachting management businesses. Further, it provides shopping center’s management; hotel training and seminars consulting; insurance and reinsurance brokerage; vehicle trading; accounting and tax consulting; and payroll and labor affairs counseling services, as well as exploits and generates energy through renewable energy resources. Additionally, the company operates food and entertainment halls; engages in stock exchange operations and real estate investment businesses; and provides telecommunication and IT services, support and e-commerce services, travel - rental services, wind energy park exploitation, consultancy services for real estate development and investments, and investment advice. It operates approximately 620 branches. The company was founded in 1916 and is headquartered in Athens, Greece.
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