Cochlear $11.6 B market cap, page-12

Currently unlisted. Proposed listing date: 4 SEPTEMBER 2024 #

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patto66

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15/09/18

01:11

Post #: 35616749
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Originally posted by Taurean7 ↑

This is the type of fundamental valuation exercise that any serious long-term investor should consider undertaking @pilko3 in order to inform their decisions to hold.

As mature businesses, Cochlear currently trades on a P/E ratio of 47.4 (MCap $11.66B, Earnings $246M) and Resmed on a ratio of 50.5 (MCap A$22.1B, Earnings A$438M). These companies have healthcare businesses comparable to ResApp, and so a P/E multiple of around 50 for the market to apply to RAP once profitable can be taken as appropriate.

This then indicates that each RAP earnings component of $10M p.a. would justify a market cap contribution of $500M. With 659M RAP shares currently on issue this translates to a 75.9 cents contribution to the share price.

So, taking future earnings of $100M as an example, a share price of $7.59 then would apply, with EPS of 15.2 cents. Applying a franked dividend payout ratio of 50%, net dividend would be 7.6c p.a., or a gross dividend of 10.9c per share allowing for franking contributions.

Your estimate of $1B p.a. earnings might require a few years to attain, but if so this would justify a share price of $75.90 should that be achieved, with a gross dividend annual of $1.09 per share.

The potential definitely is there.

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I think though if Performance share and options are achieved the total register is closer to 800 million. Still the mind boggle at the potential numbers. But lets just get through the US trials first then let the speculation run wild.

RAP Price at posting: 27.0¢ Sentiment: Hold Disclosure: Held
14 Upvote

0 Great analysis

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