Abstract :

PT Bank ABC Tbk aspires to be one of the top 10 global sharia banks in 2025 in terms of market capitalization. As of December 2023, PT. Bank ABC Tbk ranks 13 with 5,18 billion USD in market capitalization. This research aims to examine PT. Bank ABC Tbk stock by using Discounted Cash Flow (DCF) through Free Cash Flow to Equity (FCFE), and Relative Valuation method through the Price to Book Value (PBV), and to determine whether the stock is undervalued or overvalued.

According to Free Cash Flow to Equity (FCFE) valuation result, the intrinsic value per share of PT. Bank ABC Tbk is Rp 37.497 per share, while its share price as of 31 December 2023, is Rp 1.740, indicating that the stock of PT. Bank ABC Tbk is undervalued by the market. This means that the market has not completely recognized the PT. Bank ABC Tbk ‘s ability to generate future cash flows. PT. Bank ABC Tbk’s undervalued stock offers the possibility of returns for the potential investor as the share price rises over time to reflect the intrinsic value per share.

The company’s Price to Book Value (PBV) is 2.07, while the PBV of the average of the company’s peers is 2.72. This means PT Bank ABC Tbk is undervalued ie. the share is underpriced compared to the average of its peers.

Based on the result, this research recommends to buy the stock of PT. Bank ABC Tbk because it is undervalued based on FCFE and based on PBV.

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Keywords :

FCFE Valuation, Price to Book Value., Stock valuation.

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