Financial Evaluation of BVZ Holding AG
Context:
This bachelor thesis addresses the financial valuation of BVZ Holding AG, a key player in Switzerland's transportation and tourism industry. Operating primarily in the Swiss Alps, BVZ Holding AG offers regional railway transport and adventure travel services, including renowned services such as the Glacier Express and the Gornergrat railway. The thesis aims to provide a detailed evaluation of BVZ Holding AG's market value to support strategic and investment decisions.
Objective:
The thesis aims to determine the fair market value of BVZ Holding AG. This valuation is essential for understanding whether the company is accurately valued, overvalued, or undervalued. Knowing the fair value assists in making informed investment choices, strategic planning, and improving transparency in financial reporting. Additionally, the valuation supports strategic activities like mergers and acquisitions, optimizing shareholder value, and identifying market opportunities. The work adheres to academic standards and is not intended as professional financial advice.
Methodology:
The study begins with a detailed description of BVZ Holding AG's business activities and strategic relationships, followed by a SWOT analysis to identify its strengths, weaknesses, opportunities, and threats. The competitive position is evaluated using the PESTEL framework to examine political, economic, sociocultural, technological, environmental, and legal factors, and Porter's Five Forces model to assess industry dynamics, including the threat of new entrants, bargaining power of suppliers and customers, substitutes, and competitive rivalry. Building on these analyses, the thesis conducts a detailed financial analysis of BVZ Holding AG's historical performance, focusing on key metrics such as Return on Invested Capital (ROIC), sales growth, personal expenses, EBITDA margin, leverage, and capital expenditures (CAPEX). Finally, the company's value is assessed using the Discounted Cash Flow (DCF) model and Comparable Company Analysis (CCA), incorporating realistic assumptions about strategic assets, growth prospects, and industry position to ensure a comprehensive and accurate valuation.
Results:
The thesis combines financial and strategic analyses to determine the fair market value of BVZ Holding AG. Using the Discounted Cash Flow (DCF) method, the fair share price was calculated to be CHF 1,208.27 as of December 31, 2023. The Comparable Company Analysis (CCA) provided a relative share price of CHF 1,587.29. Based on these methods, the thesis concludes that BVZ Holding AG is significantly undervalued. By combining 90% of the DCF valuation and 10% of the CCA valuation, the target price is set at CHF 1,246.17, indicating a potential increase of 35.45% from the current market price of CHF 920.00.
BVZ Holding AG's strategic location in the Swiss Alps, particularly in Zermatt, along with its unique services such as the Glacier Express and Gornergrat railway, offer significant competitive advantages. The recovery of international tourism, especially from Asia, presents further growth opportunities. Despite facing high debt levels and competitive challenges, the thesis projects a positive outlook for BVZ Holding AG, recommending its shares for stable growth and value appreciation. The company's strong financial strategy and favorable financing conditions further support this optimistic valuation.
Additionally, the thesis highlights BVZ Holding AG's commitment to sustainability through various environmental and social initiatives, which reinforces its long-term value and resilience. The thorough valuation approach, incorporating both qualitative and quantitative analyses, ensures a realistic and comprehensive assessment of BVZ Holding AG's market value.