The Structure of the Equity Research Report
The Structure of the Equity Research Report
Advanced Company Valuation Uppsala U i U l University it Department of Business Studies
© Copyright 2005, Joachim Landström. All rights reserved
L0- 2
The equity research report template
Highlights Investment summary y Valuation Business description Other headings Industry description and competitive position Historical financial analysis Estimates Investment risks Disclosures
© Copyright 2005, Joachim Landström. All rights reserved
1
L0- 3
Template sections
Highlights section
Tells the reader why they should read the report. y y p 1-2 sentences per bullet. Be clear and concise.
Investment summary section
Make a longer statement about your recommendation. Make assertions that back up your recommendation. Leave support of assertions to the body of report.
© Copyright 2005, Joachim Landström. All rights reserved
L0- 4
Template sections
Valuation section
Used to justify y j y your p price target g Each of the models that you use should be presented. Do not reiterate textbook material. You should instead read professional report available on the website and ponder how they wrote it. Then do something similar. Risks to the price target should be included (NASD, Rule 2711: h.7)
• Incorporated as a sensitivity analysis of the valuation based on ERP, RNOA et cetera. • See also slide # 9 on investment risk.
© Copyright 2005, Joachim Landström. All rights reserved
2
L0- 5
Business description section
Describe business, products, finances, and strategy of company. company (see also slide # 7) Relative importance of segments and products. Highlight important assets or liabilities. Special situations/earnings interruptions
M&As Restructurings – effects/pay back expectations Discontinued operations
Where i th l Wh is the leverage? ?
Operating: fixed v variable costs
Value added How to manage downturn
© Copyright 2005, Joachim Landström. All rights reserved
L0- 6
Advanced Company Valuation Uppsala U i U l University it Department of Business Studies
© Copyright 2005, Joachim Landström. All rights reserved
L0- 2
The equity research report template
Highlights Investment summary y Valuation Business description Other headings Industry description and competitive position Historical financial analysis Estimates Investment risks Disclosures
© Copyright 2005, Joachim Landström. All rights reserved
1
L0- 3
Template sections
Highlights section
Tells the reader why they should read the report. y y p 1-2 sentences per bullet. Be clear and concise.
Investment summary section
Make a longer statement about your recommendation. Make assertions that back up your recommendation. Leave support of assertions to the body of report.
© Copyright 2005, Joachim Landström. All rights reserved
L0- 4
Template sections
Valuation section
Used to justify y j y your p price target g Each of the models that you use should be presented. Do not reiterate textbook material. You should instead read professional report available on the website and ponder how they wrote it. Then do something similar. Risks to the price target should be included (NASD, Rule 2711: h.7)
• Incorporated as a sensitivity analysis of the valuation based on ERP, RNOA et cetera. • See also slide # 9 on investment risk.
© Copyright 2005, Joachim Landström. All rights reserved
2
L0- 5
Business description section
Describe business, products, finances, and strategy of company. company (see also slide # 7) Relative importance of segments and products. Highlight important assets or liabilities. Special situations/earnings interruptions
M&As Restructurings – effects/pay back expectations Discontinued operations
Where i th l Wh is the leverage? ?
Operating: fixed v variable costs
Value added How to manage downturn
© Copyright 2005, Joachim Landström. All rights reserved
L0- 6