Analysts provided comprehensive valuation estimates for Saudi Aramco, which ranged between $ 1.2 billion and $ 2.3 billion, said fund managers who have seen research notes, when the oil giant began its initial public offering (IPO) at the local stock exchange .
Bank analysts began showing IPO investigations to fund managers shortly after Aramco, the world's most profitable company, announced Sunday its intention to float on the national stock market in what could be the world's largest list .
Research reports highlight the challenge it faces in reaching the initial valuation goal of Saudi Crown Prince Mohammed bin Salman of $ 2 billion for the world's largest oil producer, and some banks have said it could be around $ 1.5 billion
Bank of America (BOFA) Merrill Lynch estimates that Aramco's valuation could range between a minimum of $ 1.2 trillion and a maximum of $ 2.3 trillion, while EFG Hermes has a capital valuation of $ 1.55 trillion to $ 2.1 trillion, they said Two fund managers who have seen the research reports. Reuters.
Banks were not immediately available for comment.
BOFA Merrill's research is based on the discounted cash flow model, a valuation methodology that uses future cash flow, according to a fund manager who saw the investigation.
The Credit Suisse investigation also has similar broad ranges, the fund manager said.
"These ranges are always wide, since research analysts want to cover both low and high, so you want to show the sensitivity of the assumptions," said one analyst.
EFG Hermes's research involves an estimated business value to EBITDA ratio for 2020 from 6.9 times to 9.4 times, a price / earnings ratio of 14.5 times to 19.5 times, and a dividend yield of 3.9 percent at 5.3pc.
Aramco's long-awaited announcement on Sunday did not reveal the amount of shares to be sold, the price or the launch date.
The sources have said Reuters that Aramco could offer 1-2 percent of its shares in the Riyadh exchange, raising as much as $ 20 billion to $ 40 billion. An agreement of more than $ 25 billion would surpass the record of Chinese e-commerce giant Alibaba in 2014.