Determining the Intrinsic Value of a Stock: A Case study of BRAC Bank Limited

Abstract

This report mainly focused on determining the stock valuation of BRAC BANK applying the different valuation methods. The initial part of this report contains my experiences during my internship program at LankaBangla Securities Ltd and my work routine and accomplishment during that period in research department. The subsequent report follows performance highlights with some basic ratios for understanding the current situations of this bank. The main part of it shows the stock valuation of BRAC BANK and the methods which I followed to determine its intrinsic value to find whether it undervalued or overvalued. They methods used are residual income approach and multiple approaches. Among multiple approach I took P/B and P/E multiple to find its price. At the end of it I found the stock was undervalued by 27.5 percent or more than 20BDT from forecasted value by combining above those three stock valuation models. From there I put 40 percent weight in residual income valuation and 30 percent in P/B as well as 30 percent in P/E ratio to calculate my desired outcome.