European Retail Valuation, Catalysts and Latest Research

Research evidence excerpt

European Retail Valuation, Catalysts and Latest Research

Valuation Method and Risk Statement

The retail sector earnings outlook, our price targets and ratings are in part dependent on

customer reception to product ranges (e.g. product risk), inventory availability (e.g. supply

chain functionality), levels of consumer spending (macro backdrop and level of discretionary

income), the availability of suitable real estate and functionality of online infrastructure,

management and competitive action.

The HOLT methodology does not assign ratings or a target price to a security. It is an analytical

tool that involves use of a set of proprietary quantitative algorithms and warranted value

calculations, collectively called the HOLT valuation model, that are consistently applied to all

the companies included in its database. The HOLT valuation model is a discounted cash flow

model. Third-party data (including consensus earnings estimates) are systematically translated

into a number of default variables and incorporated into the algorithms available in the HOLT

valuation model. The source financial statement, pricing, and earnings data provided by

outside data vendors are subject to quality control and may also be adjusted to more closely

measure the underlying economics of firm performance. These adjustments provide

consistency when analyzing a single company across time, or analyzing multiple companies

across industries or national borders.

The default scenario that is produced by the HOLT valuation model establishes a warranted

price that represents the expected mean value for a security based upon empirically derived

fade algorithms that forecast a firm's future return on capital and growth rates over an

extended period of time.