Daimler (EUR 39.44) – BUY – Target price: EUR 51.97; potential +32%
At EUR 39.44, Daimler shares are currently valued at 7.2x prospective 2013E earnings and 6.7x prospective 2014E earnings; the latter is at a 36% discount to the 5-year average historic valuation of 10.5x and at a 25% discount to the 10-year low historic valuation of 8.9x. This is inconsistent with the implication that our estimates for 2014E EPS (EUR 5.91) are 44% above the 5-year average of EUR 4.11 and 63% above the 10-year average of EUR 3.62.
A valuation in line with the 10-year low historic valuation of 8.9x implies a share price of EUR 52.63 at year-end 2014E and time-discounted (yield of 10-year Bund) a target price of EUR 51.97 at year-end 2013E, which is 32% above the current share price and 15% below our previous target price of EUR 60.91 (February 11th). (See our latest company report ‘Daimler: 1Q13E preview’ of April 16th.)
041613 CGI Daimler – 1Q13E preview and new FY13E
041613 CGI Daimler Valuation