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Identifying Comparables and Valuation Using PB and PE Advanced Auto Parts book value per share is $51.18 and its forward earnings estimate per share is

Identifying Comparables and Valuation Using PB and PE

Advanced Auto Parts book value per share is $51.18 and its forward earnings estimate per share is $7.90. The following information is also available for Advanced Auto Parts and a peer group of companies from the auto parts sector.

Ticker

Market

Cap

($ mil)

PB

Current

Forward

PE

(FY1)

EPS 5-Year

Historical

Growth Rate

ROE

(T 4Q)

Advanced Auto Parts (AAP) 11,110 3.03 19.71

1.6%

11.39%

AutoZone (AZO) 28,440 17.89 17.78

5.7%

91.32%

CarMax (KMX) 14,010 4.06 16.06

11.3%

25.44%

America's Car-Mart (CRMT) 18,920 2.27 12.01

17.6%

20.72%

Copart Inc. (CPRT) 18,920 10.64 31.34

27.1%

36.48%

O'Reilly Auto Parts (ORLY) 30,520 210.93 22.73

14.6%

282.30%

US Auto Parts Network (PRTS) 59 1.63 21.30

(20.7)%

(25.93)%

Gentex (GNTX) 7,062 3.71 16.55

14.5%

22.95%

b. Assume that you use as comparables the following set of companies: KMX, CRMT, and GNTX. Estimate Advanced Auto Parts equity intrinsic value per share using the PB ratio from these peer companies.

Round answer to two decimal places.

$Answer

c. Use the same comparables as in part b and estimate Advanced Auto Parts equity intrinsic value per share using the PE ratio from these peer companies.

Round answer to two decimal places.

$Answer

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