An analyst gathers the following information about Company XYZ and two of its peers. Based on this information, calculate the implied share price of Company XYZ.

XYZ

Peer 1

Peer 2

Share Price

30

18

42

EPS

1

1

3

Question

An analyst gathers the following information about Company XYZ and two of its peers. Based on this information, calculate the implied share price of Company XYZ.

XYZ

Peer 1

Peer 2

Share Price

30

18

42

EPS

1

3

BlackTom AI · Accepted Answer

The question provides a small set of data for XYZ and two peers: share prices and earnings per share (EPS).

First, I’ll outline the standard relative valuation approach most commonly used here. A company’s price can be estimated by applying a representative price-to-earnings (P/E) multiple observed in peer companies to the company's own EPS. In other words, you compute the P/E multiple for each peer, then apply an average (or chosen) multiple to XYZ’s EPS to get an implied price for XYZ.

Let’s compute the peers’ P/E multiples:
- Peer 1: Price = 18, EPS = 1 => P/E = 18/1 = 18.
- Peer 2: Price = 42, EPS = 3 => P/E = 42/3 = 14.

Next, derive a simple average of these peer multiples to serve as the benchmark multiple:
- Average P/E = (18 + 14) / 2 = 32 / 2 = 16.

Now apply this average multiple to XYZ’s EPS, which is 1:
- Implied XYZ price = Average P/E × XYZ EPS = 16 × 1 = 16.

So, using a straightforward relative valuation based on peer P/E multiples, the implied share price for XYZ would be 16.

A few notes on interpretation and potential discrepancies:
- If the problem statement or answer key indicates a different implied price (for example, 30), this could reflect using a different methodology (such as a different weighting of peers, a regression-based approach, or a specific preferred multiple), or it could simply be a misprint or data inconsistency in the question/answer set.
- It’s also common to use a trimmed or median P/E, or to adjust for any known differences in growth, risk, or capital structure between XYZ and its peers. Those adjustments can shift the implied price away from the simple average calculation.
- Since only EPS and price data are provided here, the most transparent and standard approach is to use the peer P/E multiples and apply their average to XYZ’s EPS, which yields 16, not 30.

If you’re expected to produce 30 as the implied price, I would check whether the problem intended a different method (e.g., using a different set of peers, a different valuation metric, or a calculation error in the data given).

25400 金融知识 - 2025 年春季 🔴 课堂测验练习题 2

An analyst gathers the following information about Company XYZ and two of its peers. Based on this information, calculate the implied share price of Company XYZ. XYZ Peer 1 Peer 2 Share Price 30 18 42 EPS 1 1 3

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