In a Research Note on the Ordinary Shares of the MB Fashion Group Dated early July 2020: Finance Coursework, NUS, Singapore

Assignment Brief:

In a research note on the ordinary shares of the MB Fashion Group dated early July 2020 when a recent price was $7.73 and projected annual dividends were $0.05, an analyst stated a target price of $9.20. The research note did not discuss how the target price was obtained or how it should be interpreted.

1. Assume the target price represents the expected price of MB. Analyse and indicate what further specific information would you need to form an opinion on whether the shares are overpriced, fairly priced, or underpriced?
2. Explain why you would need the information?