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Is this Large Market Cap Stock target price reasonable for Sotheby’s (NYSE:BID)?

The company in question is, Sotheby’s (NYSE:BID) currently with a stock price of 35.96 (-0.03% today). The market cap for Sotheby’s is 2036.98, and is in the sector Services, and Specialty Retail, Other industry. The target price for Sotheby’s is 36.5. Currently Sotheby’s is trading with a P/E of 55, and a forward P/E of 15.64. Average volume for Sotheby’s is 1055.1 and so far today it is 141978.

Performance in the last year for Sotheby’s has been 9.01%. For EPS growth, Sotheby’s has seen a growth of -62.40%, and is looking to grow in the next year to 8.49%. More long term stats show that EPS growth has been -23.00% over the last five years and could be 15.00% for the next five years. Sotheby’s has seen sales growth quarter over quarter at -38.80%, with EPS growth quarter over quarter at 44.20%. The 20-day simple moving average is -6.06%, with the 200-day simple moving average coming to 21.42%.

Since the IPO date for Sotheby’s on the 5/13/1988, Sotheby’s has seen performance year to date to be 39.64%. With Sotheby’s trading at 35.96, the dividend yield is 1.11%, and the EPS is 0.65.

So could Sotheby’s, be undervalued? Well as said before P/E is 55. The PEG is 3.67, P/S is 2.32 and the P/B is at 3.6. The P/cash is 4.29, with P/free cash flow at 14.55.

Sotheby’s ability to deal with debt shows that the current ratio is 1.6, and the quick ratio is 1.4. This is with long term debt/equity at 1.97, and total debt/equity at 1.99.

In terms of margins, Sotheby’s has a gross margin of 76.60%, an operating margin of 18.80% and a profit margin of 3.80%.Payout ratio for Sotheby’s is 29.80%. Return on assets come to 1.20% with return on investment coming to 3.60%.

Insider ownership for Sotheby’s, is at 15.10% and institutional ownership comes to *TBA. Outstanding shares are at 56.63. While shares float is 46.46. The float short is currently 22.41%, and short ratio is 9.87.

Disclaimer: Remember there is a risk to your investment, this is not a recommendation, nor personal advice, never invest more than you are able too loose.

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Tony Dabbs

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