Core Insights - L'Oréal S.A. is increasing its stake in Galderma Group AG from 10% to 20% [1] Valuation Methods - Various methods exist for sell-side analysts to determine a company's fair value, including DCF, multiples approach, and reverse valuation [1] - The DCF method requires precise assumptions and can introduce biases, while the multiples approach relies on the assumption that peer companies are fairly priced [1] - Reverse valuation starts from the market price and discount rate to uncover the free cash flow assumptions embedded in the price, providing a more straightforward assessment of market beliefs [1] Free Cash Flow Analysis - A Free Cash Flow to Equity (FCFE) model is utilized to assess what belongs to shareholders, calculated as Earnings + Amortization – CAPEX – average acquisition cost [1] - The analysis disregards working capital and debt changes, focusing on three key figures: earnings, amortization, and investments [1] Forecasting Methodology - The H-model is applied for forecasts, featuring a 10-year two-stage growth fade with terminal growth aligned to the risk-free rate, represented by the 10-year government bond yield [1] - All cash flows are discounted using the cost of equity, calculated as RFR × beta + 5% ERP, resulting in a clear valuation of the business [1]

Core Insights - Mondelez International, Inc. has successfully passed severe cost inflation onto customers, demonstrating its competitive advantage in the market [1] Valuation Methods - Various methods exist for sell-side analysts to determine a company's fair value, including DCF, multiples approach, and reverse valuation [1] - The DCF method requires precise assumptions, which can introduce bias, while the multiples approach assumes peer companies are fairly priced, a notion often unsupported by historical data [1] - Reverse valuation starts from the market price and discount rate, revealing the free cash flow assumptions embedded in the price, providing a straightforward reality check [1] Free Cash Flow Analysis - A Free Cash Flow to Equity (FCFE) model is utilized to assess what truly belongs to shareholders, calculated as Earnings + Amortization – CAPEX – average acquisition cost = FCFE [1] - The analysis disregards working capital and debt changes, focusing on core business metrics: earnings, amortization, and investments [1] Forecasting Methodology - The H-model is applied for forecasts, featuring a 10-year two-stage growth fade with terminal growth equal to the risk-free rate, represented by the 10-year government bond yield [1] - All cash flows are discounted using the cost of equity, calculated as RFR × beta + 5% ERP, resulting in a clear picture of the business's true worth [1]

Core Insights - Colgate-Palmolive Company is often underestimated when viewed solely through its basic product offerings like toothpaste and body wash, but a deeper analysis reveals significant business dynamics [1] Valuation Methodology - Various methods exist for determining a company's fair value, with the DCF method being complex and prone to biases, while the multiples approach relies on the assumption that peer companies are fairly priced, which is often not the case [1] - Reverse valuation starts from the market price and discount rate, working backward to uncover the free cash flow assumptions embedded in the price, providing a more straightforward assessment of market beliefs [1] - The Free Cash Flow to Equity (FCFE) model is utilized to determine what belongs to shareholders, calculated as Earnings + Amortization – CAPEX – average acquisition cost = FCFE, ignoring working capital and debt changes for clarity [1] - Forecasts employ the H-model, which features a 10-year two-stage growth fade, with terminal growth aligned to the risk-free rate, specifically the 10-year government bond yield [1] - All cash flows are discounted using the cost of equity, calculated as RFR × beta + 5% ERP, resulting in a clear and noise-free valuation of the business [1]

Core Insights - Colgate-Palmolive Company is often underestimated when viewed solely through its basic product offerings like toothpaste and body wash, but a deeper analysis reveals more about its business dynamics [1] Valuation Methods - Various methods exist for sell-side analysts to determine a company's fair value, including DCF, multiples approach, and reverse valuation, each with its own strengths and weaknesses [1] - The DCF method requires precise assumptions, which can lead to biases, while the multiples approach relies on the assumption that peer companies are fairly priced, a notion that is often not supported by historical data [1] - Reverse valuation starts from the market price and discount rate, working backward to uncover the free cash flow assumptions embedded in the price, providing a more straightforward assessment of market beliefs [1] Free Cash Flow Analysis - A Free Cash Flow to Equity (FCFE) model is utilized to determine what truly belongs to shareholders, calculated as Earnings + Amortization – CAPEX – average acquisition cost = FCFE, ignoring working capital and debt changes [1] - The analysis focuses on three key figures: earnings, amortization, and investments, which are essential for understanding the core business performance [1] Forecasting Approach - The H-model is applied for forecasts, which involves a 10-year two-stage growth fade, with terminal growth aligned to the risk-free rate, specifically the yield of 10-year government bonds [1] - All cash flows are discounted using the cost of equity, calculated as RFR × beta + 5% ERP, resulting in a clear and noise-free valuation of the business [1]

Core Insights - Emerson Electric Co. has experienced poor momentum over the last three months, receiving a D+ momentum grade for the period [1] Valuation Methods - Various methods exist for sell-side analysts to determine a company's "fair" value, including DCF, multiples approach, and reverse valuation [1] - The DCF method requires precise assumptions, which can lead to biases, while the multiples approach assumes peer companies are fairly priced, a notion often unsupported by historical data [1] - Reverse valuation starts from the market price and discount rate, revealing the free cash flow assumptions embedded in the price, providing a direct reality check on market beliefs [1] Free Cash Flow Analysis - A Free Cash Flow to Equity (FCFE) model is utilized to assess what truly belongs to shareholders, calculated as Earnings + Amortization – CAPEX – average acquisition cost = FCFE [1] - The analysis disregards working capital and debt changes, focusing on three key numbers: earnings, amortization, and investments [1] Forecasting Approach - The H-model is applied for forecasts, featuring a 10-year two-stage growth fade with terminal growth equal to the risk-free rate, represented by the 10-year government bond yield [1] - All cash flows are discounted using the cost of equity, calculated as RFR × beta + 5% ERP, resulting in a clear picture of the business's true worth [1]