Valuation of Stock Project

For this activity, you will need to select a publicly traded firm and a major competitor. Firms from any industry can be used.
Go to reuters.com and for the firm you have selected obtain the trailing twelve-month P/E ratio for the firm, industry, and sector. (You can use other sources if you wish) Use information about your company’s earnings and industry and sector’s P/E s based on the P/E ratio value your selected firm as indicated in the example. If there is no earnings estimate, or the earnings estimate is negative, use earnings for a previous year.
Once you have completed the above write a short report discussing the valuation of your selected firm and competitor. Note if the current price is very close to “Estimated share price based on TTM P/E and Earnings past 12 months.” This should be very close if not you have likely done something wrong. How does the valuation of your firm compare to that of the competitors based on the P/E ratio? Why might this be the case? How does you firm’s current price compare to the estimated price using the industry and sector P/E’s compare both for the TTM and estimated year end? Is it higher or lower? Why might that be (provide one rational reason why)? Based on simple analysis which of the two firms (your selected firm and its competitor) appears to be undervalued? Why did you draw that conclusion? What do you suspect is the reason?