Authors: Pablo José Arana Barbier; Kurt Johnny Burneo Farfán
Addresses: CENTRUM Católica Graduate Business School (CCGBS), Pontificia Universidad Católica del Perú (PUCP), Jr. Daniel Alomía Robles 125, Urb. Los Álamos de Monterrico, Santiago de Surco, 15023, Lima, Peru ' CENTRUM Católica Graduate Business School (CCGBS), Pontificia Universidad Católica del Perú (PUCP), Jr. Daniel Alomía Robles 125, Urb. Los Álamos de Monterrico, Santiago de Surco, 15023, Lima, Peru
Abstract: There is still a debate regarding which valuation multiples can estimate the price of a stock. Nevertheless, recent research has not considered previous relevant findings and authors are still in an 'exploratory' phase that targets multiples randomly, without analysing intentionally developed and emerging markets separately. The purpose of the investigation is to determine how strongly do the valuation multiples preferred by the literature all around the world explain the price of the stocks in emerging countries such as Peru, through panel data multiple linear regression models. Specific delimitations based on the literature are considered. Results show that: a) the model composed by valuation multiples from different emerging markets studies correlates strongly with the stock price throughout 20 years of analysis; b) the model can be reduced to a very short but statistically solvent expression; c) the commodity-related business is introduced as a novel explanatory variable.
Keywords: cost efficiency; EBITDA per share; earnings per share; emerging markets; panel data; multiple linear regression; stock valuation; commodity-related business; valuation models; valuation multiples; Peru.
International Journal of Economic Policy in Emerging Economies, 2021 Vol.14 No.1, pp.39 - 65
Received: 30 Aug 2019
Accepted: 13 Feb 2020
Published online: 04 Dec 2020 *