Discussion 7 PDF

Title Discussion 7
Author Erica Ann
Course Personal Financial Planning
Institution Southern New Hampshire University
Pages 2
File Size 56.9 KB
File Type PDF
Total Downloads 34
Total Views 139

Summary

Discussion Board...


Description

Stock 1 Choice: Medtronic PLC Peer: Johnson & Johnson Industry: Medical Instruments and Equipment P/E Ratio: 3.29 Medtronic, PLC specializes in medical instruments and equipment. They have had a revenue growth of 6% over the last 3 years. The revenue went from $28.8 billion to $30.6 billion from fiscal 2016 to fiscal 2019. Medtronic has a stock price of $108.50, which recently increased to over $100 in the last few months. Its ESP is 3.29. It’s competitor, Johnson & Johnson, has a stock price of $137.32 and an ESP of 6.12. Medtronic’s P/E ratio is 33.1804 vs. Johnson & Johnson’s whose ratio is 22.4163. Based on this, I feel that Medtronic’s stock is slightly overpriced at this time, however their revenue does show growth potential. Stock 2 Choice: American Airlines Group, Inc Peer: JetBlue Corp Industry: Airlines/ Air Freight P/E Ratio: 3.33 American Airlines is a holding company whose business is network carrier, as well as scheduled air transportation for passengers and cargo. American Airlines has a revenue of $45,041,000,000 and a net income of $1,506,000,000. They have a stock price of $27.89 and a ESP of 3.33. The P/E ratio is 8.4234. Their competitor is JetBlue Corp, which has a revenue of $7,932,000,000 and a net income of $440,000,000. Their stock price is $17.05 with an ESP of 1.44. Their P/E is 11.8706. Based on the P/E Ratios, I would say that American Airlines is underpriced. Their revenue and net income are strong compared to their competitor, and I would consider them a good investment. Stock 3 Choice: General Motors Corp Peer: Ford Motor Company Industry: Autos - Manufacturing P/E Ratio: 6.37 General Motors is a company that designs, builds and sells trucks, cars, crossover vehicles and parts. They have a revenue of $147,049,000,000 and a net income of $8,014,000,000. They have a P/E Ratio of 5.8267, a stock price of $36.67 and a ESP of 6.37. Their competitor, Ford Motor Company, has a revenue of $158,654,000,000 and a net income of $2,169,000,000. Their P/E ratio is 16.4909, a stock price of $9.12 and an ESP of 0.56. Comparing the two, I would say the General Motors is a safer investment as their ESP is significantly higher than Ford and their stock seems to be priced low. Their net income is also reflecting growth. Stock 4

Choice: Target Corp Peer: Walmart Industry: Retail – General Merchandise/ Department Stores P/E Ratio: 18.5745 Target is a department store offering a wide variety of general merchandise and food. They have a revenue of $76,847,000,000 and a net income of $3,153,000,000. Their P/E ratio is 18.5745, with a stock price of $113.18 and an ESP of 6.08. Their competitor has revenue of $517,989,000,000 and a net income of $2,169,000,000. They have a stock price of $119.72, a P/E ratio of 27.0181 and a ESP of 4.46. While they do not have the net income of revenue that Walmart has, I feel that they are priced appropriately and have potential for growth. I would consider them a good investment as their sales growth is slightly higher than Walmart. This industry could face issues in the future as more and more people are shopping online. If they stay competitive with their online sales, they should be OK.

Kalogeropoulos, D. (2018, May 27). Better Buy: Walmart vs. Target. Retrieved from https://www.fool.com/investing/2018/05/27/better-buy-walmart-vs-target.aspx.

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Team, T. (2019, October 2). What's Driving Medtronic's Revenue Growth? Retrieved from https://www.forbes.com/sites/greatspeculations/2019/10/03/whats-driving-medtronics-revenuegrowth/#470ed58d768b....


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