For this activity, you will need to select a publicly traded firm and a major competitor. Firms from any industry may be used.

Be sure you carefully review the rubric and the information in the Data, Assignment Details, and Deliverable sections.

	Firm	Stock Symbol	Current Share Price	Firm P/E Ratio (TTM)	Firm P/E High Last 5 yrs.	Firm P/E Low Last 5 yrs.	Industry P/E Ratio (TTM)	Sector P/E Ratio (TTM)
Selected Firm	Boeing	BA	124.8	17.79	28.93	13.76	25.9	31.64
Major Competitor	Lockheed-Martin
	Firm	Stock Symbol	Earnings past 12 months (TTM)*	Mean Year End Earnings Estimate	Estimated share price based on TTM P/E and Earnings past 12 months		Estimated share price based on Industry's TTM P/E and Firm's earnings TTM	Estimated share price based on Sector's TTM P/E and Firm's earnings TTM
Selected Firm	Boeing	BA	7.00	8.37	124.53		181.30	221.48
Major Competitor	Lockheed-Martin
	Firm	Stock Symbol	Earnings past 12 months*	Mean Year End Earnings Estimate	Estimated share price based on TTM P/E and Earnings past 12 months	Estimated share price based on Firm's TTM P/E and Mean Year End Earnings Estimates	Estimated share price based on Industry's TTM P/E and Mean Year End Earnings Estimates	Estimated share price based on Sector's TTM P/E and Mean Year End Earnings Estimates
Selected Firm	Boeing	BA	7.00	8.37	124.53	148.90	216.78	264.83
Major Competitor	Lockheed-Martin
* The 4 most recent quarterly reports, earnings form each report added together.

Data

• Recommended data source: Reuters (Links to an external site.)
  • You can use other sources if you wish.
• For the firm you have selected, obtain the trailing twelve-month P/E ratio for the firm, industry, and sector.

Use information about your companys earnings and industry and sectors P/E s based on the P/E ratio value of your selected firm as indicated in the example. If there is no earnings estimate, or the earnings estimate is negative, use earnings for a previous year. If thats also negative, pick another company for this assignment.

The Example Table (XLSX) provides an example of a partially-completed table.

The example is only complete for one of the two firms indicated.

• Your submission must include the data for both firms.
• In the example provided, Boeings data is included. Therefore, Boeing may not be used for this assignment by any student.
• Lockheed-Martin is indicated as a competitor but no information is provided. Lockheed-Martin could still be used.

Assignment Details

Once you have completed the steps in the Data section, write a short report discussing the valuation of your selected firm and competitor.

Note if the current price is very close to Estimated share price based on TTM P/E and Earnings past 12 months. This should be very close. If not, you have likely done something wrong.

• How does the valuation of your firm compare to that of the competitors based on the P/E ratio?
• Why might this be the case?
• How does your firms current price compare to the estimated price? Using the industry and sector P/Es, compare both for the TTM and estimated year-end:
  • Is it higher or lower?
    • Why might that be?
    • Provide one rational reason why.
• Based on simple analysis, which of the two firms (your selected firm and its competitor) appears to be undervalued?
• Why did you draw that conclusion?
• What do you suspect is the reason?

Deliverable

Your submission should be:

• 1 to 1 1/2 pages in length
• Single-spaced
• Times New Roman
• 12 point font.

Include a citation indicating where you retrieved the data and the date retrieved. A table following the example must be included in your submission but is not considered as part of the page to page and a half write-up. Get to the point in your write-up. There is no need for extra baggage.

Don't worry about the table is just an example no need to be included in the submission.