Naija Lo Wa

Here are the analysis and recommendations based on the most recent results of Glaxo Smithkline and NBC. The summaries are below:

NBC:
<blockquote>In placing a fair value on the Ordinary Shares of NBC, we adjusted our earlier forecast for the FY 2009 and parameters to reflect current market developments and based on its latest results. We estimated TO, Earning Before Interest Tax Depreciation and Amortization (EBITDA) and PAT for December, 2009. We project a TO of N91.28bn, based on a growth rate of 13.99% over the previous year. We project EBITDA of N7.31bn based on EBITDA margin of 8% and a PAT of N2.94bn based on a PAT Margin of 2.12% and writing back the N1bn insurance claim. We used 1.308bn Ordinary Shares that we expect to be in issue as at December 2009. The Forward Earnings Per Share (FEPS) generates N2.24. We estimated Dividend Per Share (DPS) of N0.90 based on a dividend payout of 40% as we believe the company will increase its historical dividend payout ratio to compensate shareholders for its last year lackluster performance. Applying Enterprise Value EV/EBITDA multiple of 4.85x, a P/E multiple of 12x, we arrived at N20.62 per share using EV/EBITDA multiple and N26.91 per share price using earnings multiple. Applying a weight of 55% on N20.62 and 45% on N26.91, we arrived at N23.45 per share, which is our fair value. The forward earnings yield and dividend yield based on our fair value generate 9.56% and 3.83% respectively. We therefore place a <strong>BUY</strong> on the share price of NBC at the current market price.</blockquote>
NBC -Q3, September 2009 (202)

Glaxo Smithkline:
<blockquote>In placing a fair value on the Ordinary Shares of GlaxoSmith, we maintained our earlier top-line forecast, but adjusted our bottom-line forecast to reflect the company’s improved efficiency. Also, we adjusted our earlier parameters to reflect current market developments and its latest results. We estimated Turnover (TO), Earning Before Interest Tax Depreciation and Amortization (EBITDA) and PAT for December, 2009. We maintain our earlier estimate of the TO of N15.04bn as released in our Q1 2009 result. We project EBITDA of N3.06bn based on EBITDA margin of 20% and a PAT of N1.93bn based on a PAT Margin of 12.81%. We used 956.70mn Ordinary Shares that we expect to be in issue as at December 2009. The Forward Earnings Per Share (FEPS) generates N2.02. We estimated Dividend Per Share (DPS) of N0.97 based on a dividend payout of 48.25%. Applying Enterprise Value EV/EBITDA multiple of 7.60x, a P/E multiple of 10.22x, we arrived at N24.29 per share using EV/EBITDA multiple and N20.60 per share price using earnings multiple. Applying a weight of 55% on N24.29 and 45% on N20.60, we arrived at N22.63, which is our fair value. The forward earnings yield and dividend yield based on our fair value generate 8.91% and 4.30% respectively. We therefore place a  <strong>HOLD</strong> on the share price of GlaxoSmith at the current market price.</blockquote>
GlaxoSmithKLINE -Q3, September 2009 (238)