Stock Valuation Using Discounted Cash Flow Method with Free Cash Flow to Firm and Relative Valuation on Food and Beverage Sub-Sector Companies Listed on the Indonesia Stock Exchange for 2021-2025 Projections

Abstract

This research aims at examining the intrinsic value of stocks in the food and beverage sector in 2021. This research used the 2016-2020 data to calculate the historical performance of each company and is projected to estimate the company's financial behavior in the last five years from 2021-2025, with three scenarios, namely optimistic, moderate, and pessimistic. The methods used to assess the intrinsic value of these shares were the discounted cash flow (DCF) and the relative valuation (RV). The results found that by using the DCF method in all scenarios, namely pessimistic, moderate and optimistic, INDF and ICBP were in the undervalued conditions, and MYOR was in the overvalued condition. Meanwhile, by using the relative valuation method with the PER approach, in all scenarios, the intrinsic values of INDF, ICBP, and MYOR were in overvalued conditions. For the PBV approach, the intrinsic values of INDF and ICBP were undervalued in all scenarios, while MYOR was undervalued in the pessimistic and moderate scenarios and overvalued in the optimistic scenarios. Overall, INDF shares were undervalued by 52,3%, ICBP shares were undervalued by 26,3% and MYOR shares were overvalued by -52%.