$8 target, page-67

Great post walkingeagle. I agree with every word you say, particularly the quality of narcissistic so-called analysts.

Last year the thinking was SGS would contribute something around £95m ($168m). So back then $290m seemed a likely proposition and that as just a start with further improvement as it cemented its foothold in UK. On that figure, plus SGH ongoing $120m we get $290m.

EPS on $290 should be $203m/352 = 58c then if retain 30% for W/C and growth we have 40c. Now if we assume 10% discount rate and 5% growth we get a simplified 40/0.5 = $8

It can be seen how there was good reason to believe $8 to be a reasonable (if stretched) first year target.

The great news for those wiling to stick around for a couple of years is the fundamental reason behind those figures remains. Sure some market share might be lost due to regulatory interference but the same goes for everyone.

In my mind consolidation means those with scale survive and prosper = bigger share of a smaller pie.