1) Should Investors Buy or Short the stock?
2) What is the target price?
Required Items
COMPANY PEPSI: I WILL PROVIDE THE TEMPLATES — I will email them to you
1) Use at least 4 Bloomberg templates to make your case
2) Company Analysis (i.e. SWOT analysis)
3a) Cash Flow Analysis (Top Down Assumptions)
– How does the recent US China trade issues affect you?
– What is the appropriate beta to consider? (1Y, 3Y, 5Y, etc.)
3b) Cash Flow Analysis (Bottom Up Assumptions)
– Projects, revenues, costs (similar to Table 19.1)
– Appropriate discount rate (cost of capital)
– Sensitivity analysis (cash flows and discount rates – main assumptions can be sales growth rates and market betas)
– Compare assumptions with analyst assumptions
4) Chart that shows historical price
– Show every bond issuance (with arrows)
– How does the stock price perform -3 to +3 days after debt issuance? (Relative to market)
– What is the rating? yield? How is the yield compared to the benchmark?
– What was the debt ratio at the time of issuance? (Table 18.1 comparison)
-5) Chart that shows insider selling (at least over past 2 years)
– Bloomberg or SEC documents
– Stock price reaction when market becomes informed of insider selling
6) Chart that shows merger activity
– Stock price reaction to merger announcement
– In comparison to market returns
7 – please include bonds , options, and forecasting, and CDS
What I need from you: PEPSI CO
1) POWERPOINT PRESENTATION ( 18-25 slides) associated with your research
2) Report also due in Class (10+) pages
Let me know if you have any further questions
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