Is There An Opportunity With CEMEX, S.A.B. de C.V.’s (BMV:CEMEXCPO) 26% Undervaluation?

Source: Shutterstock Today we’ll do a simple run through of a valuation method used to estimate the attractiveness of CEMEX, S.A.B. de C.V. ( BMV:CEMEXCPO ) as an investment opportunity by projecting its future cash flows and then discounting them to today’s value. The Discounted Cash Flow (DCF) model is the tool we will apply to do this. It may sound complicated, but actually it is quite simple! Remember though, that there are many ways to estimate a company’s value, and a DCF is just one method. For those who are keen learners of equity analysis, the Simply Wall St analysis model here may be something of interest to you. The Calculation We are going to use a two-stage DCF model, which, as the name states, takes into account two stages of growth. The first stage is generally a higher growth period which levels off heading towards the terminal value, captured in the second ‘steady growth’ period. In the first stage we need to estimate the cash flows to the business over the next ten years. Where possible we use analyst estimates, but when these aren’t available we extrapolate the previous free cash flow (FCF) from the last estimate […]

Click here to view original web page at simplywall.st