Below are the price targets for Maruti Suzuki India Limited over the next 10 years.
Our price targets for Maruti Suzuki India Limited for the remainder of 2020 are:
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15,391.38 (overvalued)
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12,085.49 (fair value)
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8,779.59 (undervalued)
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5,780.80 (extreme undervalue)
The valuation targets for Maruti Suzuki India Limited are based on a dividend growth rate of 22% which is derived from slightly less than one third the average dividend growth from 2005 to 2020 and applied to Edson Gould’s Altimeter. A graphical representation of the overvalued, fair value, and undervalued levels are below.
The above Altimeter translates into the following undervalued and overvalued ranges since 2004:
10-Year Targets
Observations
Using a highly conservative dividend growth rate of 22% from 2005 allows us to project a dividend that is well within what to expect going forward. Why? Because ALL dividend growth rates following along an s-curve which ultimately compress over time, no matter the company, industry, or economy.
As shown before, the difference between the current price and the overvalued level is significant. However, the spread was equally as wide in 2012 (164% in 2012 v. 116% in 2020).
Use the data and charts as a guideline in case of material changes occur.
see also: