Novartis AG was incorporated in 1996 and is a multinational group of companies specializing in the research, development, manufacturing and marketing of a broad range of innovative pharmaceuticals and cost-saving generic medicines (Sandoz Division).
First of all, thank you for your work! I follow you on Twitter and plan to take some of your insights, as well as other Newsletters, as basis in order to structure my personal Company Analysis.
Just a quick question (even though this is an old thesis): if your estimated stock price is 14% higher than the stock price at that moment in time, how could the IRR in 5 years be as well 14%?
A yearly CAGR of 14.2%, starting at 81$, would give me a final price of around 157$ after 5 years. Am I missing something here?
Good luck on your new venture and thank you for your kind words regarding our work.
The IRR represents the discount rate that needs to be applied on the forecasted cash flows assumed in our model so as to get to $81. However, as we apply a discount rate of 10% in our valuation we got a fair value of $92 and an estimated upside of 14%. Does this make sense?
First of all, thank you for your work! I follow you on Twitter and plan to take some of your insights, as well as other Newsletters, as basis in order to structure my personal Company Analysis.
Just a quick question (even though this is an old thesis): if your estimated stock price is 14% higher than the stock price at that moment in time, how could the IRR in 5 years be as well 14%?
A yearly CAGR of 14.2%, starting at 81$, would give me a final price of around 157$ after 5 years. Am I missing something here?
Thanks in advance for your response.
Good luck on your new venture and thank you for your kind words regarding our work.
The IRR represents the discount rate that needs to be applied on the forecasted cash flows assumed in our model so as to get to $81. However, as we apply a discount rate of 10% in our valuation we got a fair value of $92 and an estimated upside of 14%. Does this make sense?