What Percentage of Boeing’s Stock Price Can Be Attributed To Growth?

May 26th, 2016 by Trefis Team
+52.45%
Upside
170
Market
259
Trefis
BA: The Boeing Company logo
BA
The Boeing Company

In this analysis, we quantify the percentage of Boeing’s stock that can be attributed to growth.

We know, that a stock’s valuation can be highly influenced by future expectations of earnings growth. However, in theory, if a company sees no growth opportunities it should distribute all its earnings as dividends to its shareholders. Assuming that a company pays all earnings as dividends for the rest of the period, we can calculate Present Value of Growth Opportunity (PVGO) of a stock from the formula given below:

Screen Shot 2016-05-26 at 3.42.29 pm

Notes: For more details about the calculation for Present Value of Growth Opportunity please refer this link.

1) The purpose of these analyses is to help readers focus on a few important things. We hope such lean communication sparks thinking, and encourages readers to comment / ask questions on the comments section
2) Figures mentioned are approximate values to help our readers remember the key concepts more intuitively. For precise figures, please refer to our complete analysis of Boeing

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