Stock Valuation Analysis Using the Discounted Cash Flow Method as a Basis for Investment Decisions in Indonesian Consumer Goods Companies
Keywords:
Discounted Cash Flow (DCF), Stock Valuation, Intrinsic Value, Free Cash Flow, Investment DecisionAbstract
Stock valuation analysis is one of the fundamental approaches used by investors to estimate the intrinsic value of a stock as a basis for making investment decisions. This study employs the Discounted Cash Flow (DCF) method to analyze the intrinsic value of stocks of seven consumer goods companies listed on the Indonesia Stock Exchange during the 2021–2025 period, namely GGRM, ICBP, GOOD, ULTJ, MYOR, AMRT, and UNVR. A quantitative approach was applied using secondary data obtained from companies' financial statements and market data. The analysis consisted of calculating Free Cash Flow (FCF), determining the discount rate using the Investor Assumption, Capital Asset Pricing Model (CAPM), and Weighted Average Cost of Capital (WACC) approaches, followed by estimating the intrinsic value using the DCF method and comparing it with the market price of each stock. The results indicate that GGRM, ICBP, ULTJ, and UNVR are classified as undervalued, while GOOD and MYOR are classified as overvalued. Meanwhile, AMRT exhibits different valuation results depending on the discount rate approach employed. These findings suggest that the magnitude of Free Cash Flow and the selection of the discount rate significantly influence the intrinsic value of stocks, making them important factors in investment decision-making.
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