Individual Project Requirements FIN 3603/5303 Spring 2021 Submission deadline: May 15, 2021 11:59 pm

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Individual Project Requirements

FIN 3603/5303 Spring 2021

Submission deadline: May 15, 2021 11:59 pm.

The purpose of this project is to get an idea of how to write an equity analysis report and how do equity analysts value a stock and give recommendations.

You need to submit two files, a write-up report and an excel spreadsheet.

The Word write-up report should consist of the following sections:

1. Business description. Introduce the company business briefly.
2. Business Segment breakdown. What is (are) the core segment(s) of the company? How much sales and profits are generated by each segment? Is there any other information you think is important for us to know? (Segment information is usually included in annual reports. Annual reports can be found at firm's Investor Relations web page. For example, WMT’s 2020 annual report can be found at http://stock.walmart.com/investors/financial-information/annual-reports-and-proxies/default.aspx)
3. Industry analysis. Analyze your company’s position in the industry and the competition it faces. You can include, for example, industry rivalry, threat of new entrants, threat of substitutes, etc.
4. Investment recommendation. Based on your valuation model, how does the estimated fair stock price compare with the current stock price? Would you like to recommend Buy, Sell or Hold?

The Excel Spreadsheet should consist of the following sections:

Sheet 1: Beta calculation

Sheet 2: WACC calculation

Sheet 3: Free cash flow model

Sheet 4: Relative valuation model

Sheet 5: Summary

(Detailed instructions are in the excel template.)

You can start from the first 3 sections of the write-up report, then move to the excel spreadsheet, and finally write the recommendation part.

Your project will be graded on: (total 100 points)

-Completion and clear presentation of all required sections in the write-up report (30 points)

-Justifications and explanations of the valuation model (50 points)

-Logical recommendation based on the valuation results (20 points)