Equity Research: Sporting Clube de Braga-Futebol, SAD

The main objective of the present thesis is to evaluate Sporting Clube de Braga – Futebol, SAD (Braga SAD), defining a price target for the company’s shares on june 30th 2022. In order to achieve this goal, it was essential to begin by studying and undersanding the football industry and business. The valuation methodologies used in the valuation of Braga SAD was the Free Cash Flow to Firm (FCFF), as an absolute valuation method, complemented by the method of multiples, as a method of relative valuation, which together bring robustness and solidity to the valuation. First we presented the company and made a strategic analysis of the company. Then we did the Porter’s 5 Forces and the SWOT analysis and finally, we conducted an economic analysis and determined the target price of Braga SAD. We concluded that Braga SAD’s shares were undervalued, since on June 30, 2022, the price per share was 7,90€, being lower than the price target achieved of 8,74€, which revelead an upside potential of 10,6%. Therefore, we recommended the purchase of Braga SAD shares, however, we have to be cautious with the possible results of the club which may introduce risk to the valuation as demonstrated in the sensitivy analysis.