Equity valuation thesis : Samsung Electronics Co.

Belhaj, Salma

http://hdl.handle.net/10400.14/55391

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Authors

Belhaj, Salma

Advisor(s)

Martins, José Tudela

Abstract(s)

This dissertation assesses Samsung Electronics' intrinsic worth by comparing its estimated share price to its market value, thereby making an informed investment recommendation. As a worldwide technological leader, Samsung continues to expand by making strategic investments in cutting-edge businesses, adjusting to market changes, and preserving a competitive advantage. The study uses comparable valuation to determine Samsung's fair value, comparing it to significant worldwide competitors including Apple, Microsoft, and TSMC. Furthermore, the Free Cash Flow to Firm (FCFF) model is used as the principal valuation method, providing a forward-looking assessment of Samsung's financial health and cash flow creation. The findings offer a buy recommendation, with an assumed share price of USD 44.42, indicating that the company is undervalued in comparison to market expectations. A sensitivity analysis examines key assumptions, such as the Weighted Average Cost of Capital (WACC) and terminal growth rate, to ensure model robustness and complete review. To improve reliability, the study cross-validates its conclusions against external financial data and market assessments, which boosts confidence in the valuation method. The findings underline the need of combining Discounted Cash Flow (DCF) analysis with multiples valuation to provide a complete picture of Samsung's future development prospects. Finally, this dissertation gives vital insights into Samsung's financial sustainability, market positioning, and investment appeal, allowing for data-driven investment decisions in a changing sector.

Esta dissertação avalia o valor intrínseco da Samsung Electronics, comparando o preço estimado de suas ações com seu valor de mercado para oferecer uma recomendação de investimento fundamentada. Como líder global em tecnologia, a Samsung expande-se por meio de investimentos estratégicos em setores inovadores, adaptando-se às mudanças do mercado e fortalecendo sua vantagem competitiva. O estudo utiliza avaliação comparável, analisando a Samsung em relação a concorrentes globais como Apple, Microsoft e TSMC para determinar seu valor justo. Além disso, emprega o modelo de Fluxo de Caixa Livre para a Firma (FCFF) como principal método, permitindo uma análise aprofundada da saúde financeira e geração de caixa da empresa. Os resultados indicam uma recomendação de compra, com um preço-alvo estimado de USD 44,42 por ação, sugerindo que a empresa está subvalorizada. Uma análise de sensibilidade examina premissas como o Custo Médio Ponderado de Capital (WACC) e a taxa de crescimento terminal, garantindo a robustez do modelo e avaliando diferentes cenários. Para aumentar a confiabilidade, os resultados foram validados com dados financeiros externos e análises de mercado. Os achados ressaltam a importância de combinar a análise de Fluxo de Caixa Descontado (DCF) com avaliação por múltiplos, fornecendo insights valiosos para decisões de investimento em um setor dinâmico.

Keywords

Avaliação de acções Avaliação relativa Custo médio ponderado de capital (WACC) Discounted cash flow (DCF) model Equity valuation Intrinsic value Investment recommendation Modelo de fluxo de caixa descontado (DCF) Recomendação de investimento Relative valuation Valor intrínseco Weighted average cost of capital (WACC)