For the publicly traded clothing store called White House Black Market Inc, calculate an estimate of its stock price. At a minimum, your model should include:
A calculation of the fully-diluted shares outstanding using the Treasury Stock Method (TSM).
A five-year projection of its free cash flows (FCF). Your forecast assumptions should be based off of your reading of background material related to White House Black Market
Valuation estimates using “comparable firm (for example New York and Company, Loft, Anne Taylor) analysis” and “precedent transactions analysis”
A valuation estimate based using a discounted cash flow (DCF) analysis. This should include:
A sophisticated calculation of WHBM’s weighted average cost of capital (WACC)
Terminal Value estimates using the discounted cash flow (DCF) method and exit multiple method (EMM).
Data tables to show the sensitivity of your stock price estimate to changes in the terminal growth assumptions
Build a valuation summary table and football field graph to present your estimated values.
Background on company.
White House | Black Market, Inc. owns and operates women clothing and accessories boutiques in the United States and Canada. The company sells work wear, casual wear, suiting, pants, jackets, skirts, dresses, tops, petites, and jeans, as well as clothing for weddings and events; shoes, bags and accessories, belts, scarves, sunglasses, bridesmaids accessories, and gifts and gift cards; and jewelry, including bridesmaids jewelry, delicates, necklaces, bracelets, and earrings. It also sells products online. The company was founded in 1985 and is based in Fort Myers, Florida. As of July 2003, White House | Black Market, Inc. operates as a subsidiary of Chico’s FAS Inc.