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NYSE Euronext, Inc. Message Board

  • new_millenium_profits new_millenium_profits Jan 20, 2007 11:03 PM Flag

    Simple Valuation Model

    While some on this forum think NYX is overpriced and should go to $85, let me point out a very simple valuation calculation. Based on P/E = Price divided by Earnings NYX at $99.96 has a P/E of 112.06 based on ttm earnings of .892.

    Projected Earnings earnings will be $1.65. Based on that, and the $99.96 price the P/E would be 60.58. To me that is a very reasonable valuation but does not take into effect the potential earnings and the premium that should be offered.

    If you put a premium on the P/E ratio and raise it to 80 based on past twelve months performance it would warrant a price of 80 times $1.65 for a share price of $132.

    This again is based on earnings of past performance and does not really take into effect the true potential earnings with the combination of ERXTF and basic cost savings by going to the electronic exchange vs. the traditional pits.

    If the P/E holds at the lofty level of 112 and the earnings come in at $1.65 that would warrant a price of $1.65 times 112 equal to $184.80 per share.

    I'll bet most investors at one time or another have invested in stocks with P/E's much higher than 112. Think about the companies that have no earnings! Those ratios push to infinity. How do you justify the stock price when that situation exists.

    I'm taking my chances on this pushing $200 by next year. If it only makes it to $150, so be it, it will just take a little longer to get to the $200!

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    • I have done the math also. I am optimistic that the forecasts are CONSERVATIVE. However, this is new territory for the NYSE. Being public has it's challenges. I have not followed the stock market closely over my lifetime. Some say Mr. Thain is the man who can do it. That is why I bought this in November. I do lose confidence when I see the very people who believe in this venture, sell, and sell hard with their millions of shares. I have this problem, I think wall street wants to take my money for themseleves instead of letting me play the game.

      • 1 Reply to iluvthisgame_halswife
      • Nymex.
        as i have been saying all summer, fall and now winter.
        nyx will join with all of the above within the next two years.
        as i have also stated nyx will move on the lse this month.
        yes, we will hit $130 on that news. We will fall back going into the spring depending on the amount of the deal.
        but personally i think do to the near monopoly of the nyx stratagy we will even larger p/e expansion.
        with a move to close to $200 close of the lse deal which will close much quicker than euronext.
        good luck and always remember never ever sell