Here are the analysis of the Q3 results for both Nestle Foods and UAC by FSDH. You can download the reports below. Here are the excerpts:

FSDH – Nestle

In placing a fair value on Nestle’s share, we adjusted our earlier forecast for the FY 2009 and parameters to reflect current market developments and based on its latest result. We estimated TO, Earning Before Interest Tax Depreciation and Amortization (EBITDA) and PAT for December, 2009. We project a TO of N69.49bn, based on a growth rate of 34.30% over the previous year. We project EBITDA of N17.02bn based on EBITDA margin of 24.50% and a PAT of N10.77bn based on a PAT Margin of 15.50%. We used 660.45mn Ordinary Shares which we expect to be in issue as at December, 2009. The Forward Earnings Per Share (FEPS) generates N16.31. We estimated a total Dividend Per Share (DPS) of N13.97, based on a dividend payout of 85.69%. We expect a final dividend of N12.02 having declared an interim dividend of N1.95 per share for the shareholders whose names will appear in the Register of Member on November 30, 2009. Applying Enterprise Value EV/EBITDA multiple of 10.17x, a P/E multiple of 12.90x (which is our estimated PE for the industry), we arrived at N253.01 per share using EV/EBITDA multiple and N210.53 per share price earnings multiple. A simple average of the two valuation methods generates N231.68 which is our fair value. The forward earnings yield and dividend yield based on our fair value generate 7.04% and 6.03% respectively. We therefore place a HOLD on Nestle Stock at the current market.

[download id="498"]

FSDH Analysis of UAC

In placing a fair value on the Ordinary Shares of UACN, we adjusted our earlier forecast for the FY 2009 and parameters for UACN Group to reflect current market developments and based on its latest result. We estimated TO, Earning Before Interest Tax Depreciation and Amortization (EBITDA) and PAT for December, 2009. We project a TO of N59.17bn, based on a growth rate of 10.63% over the previous year. We project EBITDA of N10.19bn based on EBITDA margin of 17.21% and a PAT of N6.51bn based on a PAT Margin of 11%. We used 1,280.58mn Ordinary Shares which we expect to be in issue as at December, 2009. The Forward Earnings Per Share (FEPS) generates N5.08. We adjusted for the minority interest in the valuation, which we estimated its value at 25% of the group’s value, in order to arrive at the valuation attributable to the Ordinary Shareholders. Our forecast ordinary EPS is N3.81 while the we estimated Dividend Per Share (DPS) of N2.35 based on a dividend payout of 61.61%. Applying Enterprise Value EV/EBITDA multiple of 9.25x, a P/E multiple of 12.50x, we arrived at N49.68 per share using EV/EBITDA multiple and N47.65 per share price using earnings multiple. Applying a weight of 50% to each of the valuation results, we arrived at N48.66 which is our fair value. The forward earnings yield and dividend yield based on our fair value generate 7.83% and 4.83% respectively. We therefore place a BUY on UACN Stock at the current market price.

[download id="499"]