| dc.description.abstract | The purpose of this thesis was to conduct a valuation of Entra ASA and answer our research question:
“What is Entra ASA worth as of 31.12.2023?”, with intent to find out if the share price is over- or undervalued.
Entra ASA is a commercial real estate company in Norway, that owns and operates properties in the biggest cities and in the surrounding areas. The firm was founded in the year 2000 and was listed on the Oslo Stock Exchange on the 7th of October 2014 with a share price of 65 NOK. We started our thesis by providing information about the firm and a description of the industry, before looking at valuation methods, and thereafter going into different strategic analysis of Entra. Using Porter’s Five Forces and a PESTEL analysis, we explored some external factors that may influence Entra ASA. We also used the VRIO framework in our internal analysis to look at the company’s strengths and weaknesses. Afterwards, we used these factors and added some more into a SWOT analysis to see how the factors have affected Entra ASA.
From our strategic analysis, we found out that Entra has a competitive advantage in their property strategy as well as their customer base. Their work on sustainability as well as their reputation as a lessor puts them in a great position to attract more customers. We also found threats, mostly regarding macroeconomic factors, such as inflation and the policy rate to influence their operations. Customers' changing behaviour regarding new standards and requirements, is also a threat that can influence them.
A financial statement analysis was done thereafter to get a better understanding of Entra’s financial health. Profitability, liquidity, and solidity indicators have been done. The future cash flows were estimated 5 years ahead in time where we used free cash flow to firm, and WACC as the discount factor. The WACC was calculated to be 5,08%, and we used a constant growth rate of 2,2%. Estimated share price was 109,9 NOK, which corresponds to a market value of equity of 20 011 million NOK. The market-based valuation consisted of the multipliers P/B, P/SQM, and P/S, which gave us an average share price of 126,5 NOK. We have also conducted a valuation with the dividend discount model, resulting in a share price of 65,7 NOK. Ultimately, we did 3 different sensitivity analysis to see how the share price changes under different circumstances. Considering the results from our valuation, we conclude with a sale recommendation. | |
