Emerging market stock valuation: new evidence from Peru

Pablo José Arana Barbier and Kurt Johnny Burneo Farfán

International Journal of Economic Policy in Emerging Economies, 2021, vol. 14, issue 1, 39-65

Abstract: There is still a debate regarding which valuation multiples can estimate the price of a stock. Nevertheless, recent research has not considered previous relevant findings and authors are still in an 'exploratory' phase that targets multiples randomly, without analysing intentionally developed and emerging markets separately. The purpose of the investigation is to determine how strongly do the valuation multiples preferred by the literature all around the world explain the price of the stocks in emerging countries such as Peru, through panel data multiple linear regression models. Specific delimitations based on the literature are considered. Results show that: a) the model composed by valuation multiples from different emerging markets studies correlates strongly with the stock price throughout 20 years of analysis; b) the model can be reduced to a very short but statistically solvent expression; c) the commodity-related business is introduced as a novel explanatory variable.

Keywords: cost efficiency; EBITDA per share; earnings per share; emerging markets; panel data; multiple linear regression; stock valuation; commodity-related business; valuation models; valuation multiples; Peru. (search for similar items in EconPapers)
Date: 2021
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Persistent link: https://EconPapers.repec.org/RePEc:ids:ijepee:v:14:y:2021:i:1:p:39-65

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