Equity Research
Walk me through the price-target math for a simple long pitch: EPS of $5.00, market at 14x, you argue for 16x.
Model answer
At consensus-style pricing the stock trades at 14x times $5.00 of forward EPS, or $70. Your thesis — say, margin expansion that improves earnings quality and growth — justifies a re-rating to 16x on…
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