Equity Research: The Navigator Company, S.A.

This Master Final Work (MFW) performs a valuation of “The Navigator Company, S.A” under the format and guidelines of the CFA Institute. The Navigator Company (NVG) is one of the biggest Portuguese companies, dedicated to the production of paper pulp, paper, tissue, and energy with an integrated business model. NVG is the owner of a large forest area and has an important role in the international market of its sector, representing one of the biggest Portuguese companies in the world. The company is a member of the Portuguese index (PSI-20) and its stock are publicly traded on Euronext Lisbon. There are 6 key business areas within “The Navigator Company, S.A”: (i) Research & Development (through the financing of RAIZ), (ii) Forest managing, (iii) Pulp (BEKP) production, (iv) Paper (UWF) production, (v) Tissue and (vi) Energy. NVG was created in early 1950s and has a rich history that is deeply connected to Portugal. These factors were the main drivers for the selection of this company. We achieved the target price using the Discounted Cash Flow model (DCF). To corroborate and validate the model, 3 other valuation methods were used: (i) a relative valuation method - Multiples Valuation, (ii) the Flow-to-Equity model, and (iii) the Adjusted Present Value. With a price target of 4,70 € for 2023YE, a potential upside of 14,1% and a potential upside annualized of 11,5% from the current price (4,12 €), the final recommendation for The Navigator Company, S.A is to Hold with an estimation of High risk for the company.