Below are the price targets for Reliance Industries Limited (RELIANCE.BO) over the next 10 years.
Our price targets for Reliance Industries Limited (RELIANCE.BO) in 2020 are:
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1,735.50 (overvalued)
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1,137.50 (fair value)
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539.50 (undervalued)
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357.50 (extreme undervalue)
The valuation targets for Reliance Industries Limited (RELIANCE.BO) are based on a dividend growth rate of 9.77% which is derived from the 2005 to 2020 dividend increase from 1.875 to 6.50 and applied to Edson Gould’s Altimeter. A graphical representation of the overvalued, fair value, and undervalued levels are below.
The above Altimeter translates into the following undervalued and overvalued ranges since 1996:
Historical Dividend Yield Range
10-Year Targets
Observations
As with early dividend increasing companies, the exaggerated yields are a ramp up to normalcy. In the case of Reliance Industries, normalcy arrived as the stock carried a yield range at 5% and below. Our early assessment of the stock is that it will revisit the fair value level of 1,137.50.