Lan Airlines - Comparative Multiple Analysis

Lan Airlines (Comparative Multiple Analysis)

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Notes on the Comparative Multiple Analysis of Lan Airlines

WikiWealth compares Lan Airlines's revenue, EBITDA, and EBIT multiples to their peers in order to determine the appropriate fair valuation. Click in the top right corner to experiment with Lan Airlines's comparative analysis.

Notes from the analysis:

1. WikiWealth uses quantitative measures to determine the multiple range for Lan Airlines.
2. Free cash flow to the firm (FCF) multiple is free cash flow to equity holders plus interest owed to Lan Airlines's debt holders.
3. Multiples incorporate benefits due to economies of scale; WikiWealth compares absolute enterprise value multiples to competitor's multiples.
4. WikiWealth excludes outliers when calculating individual company multiples.

Helpful Information for Lan Airlines's Analysis


How does this work? The Comparative Investment Analysis determines the value of Lan Airlines by comparing Lan Airlines financial ratios, prices, growth rates, margins, etc. to those of relevant peer groups.

Value Investing Importance? This method is widely used by investment professionals to determine the correct price of investments, especially initial public offerings (IPOs). It is one element of WikiWealth's three Wall Street approaches used to determine the correct fair value of Lan Airlines.

See the Lan Airlines cash flow (DCF) analysis for a completely different approach that's popular on Wall Street for determining the value of an investment in Lan Airlines.

Also, see the Lan Airlines's buffett intrinsic valuation analysis for WikiWealth's attempt to replicate the investing formula's used by Warren Buffett and Lan Airlines's valuation conclusion for a quick summary.