Assignment

The main company is Telstra Corporation and the peer companies are Spark New
Zealand, TPG Telecom LTD and Vocus Group LTD

You, as an analyst, are required to give an investment recommendation of BUY, SELL, or

HOLD to your institutional and/or private equity clients.

Part I. Qualitative assessment of the firm’s industry, its strategy, and key value drivers

 Consider how your firm’s position in its industry, and its strategy, have affected
the firm’s past performance and risk, and how it determines the outlook for the
firm.
 Assess firm risk conditions. You can refer to MD&A section of a firm’s annual
report as a starting point for risk assessment.

Part II. Comparative analysis

 Select 3 or 4 peer companies in the same industry sector as members of the group.

 The companies must be listed either on the Australian Stock Exchange or an

international stock exchange.

 The task is to undertake a comparative analysis of the companies in that sector based
generally on the Du Pont method, but not exclusively. (i.e. other items of
comparison may also be made.)

Part III. Forecasting and Valuation

 Forecast your firm’s future performance (5 years) considering earnings persistence

and growth.
 Value the firm using the residual earnings model.
 Based on your valuation, refer to current market price and recommend BUY,
HOLD, or SELL.

Synthesis of the report:

The above three components should be intrinsically linked. So use relevant introduction,
comparison and supplementary materials.

Specifications:

 An executive summary of no more than 200 words

 A clear structure of sections and sub-sections
 Full references for information cited
  The body of the report must be no more than seven pages, using font size 11 and
spacing of 1.5, excluding the executive summary, title page, tables, exhibits,
diagrams and other supporting material (e.g., appendices).
 A clear recommendation to BUY, HOLD, or SELL
 Concise

Referencing

All sources used for a written piece of assessment must be referenced using the Harvard
referencing style. This is to acknowledge that your material is not based entirely on your
own ideas, but is based, in part, on the ideas, information, and evidence of others