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Global Finance Magazine
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McKinsey’s Koller: Valuation Isn’t Broken—Expectations Are
- Geography plays a role in affecting a company's valuation globally, with potential impacts from events like a US recession.
- Companies may be frustrated with US volatility and exploring opportunities in Europe and the APAC region.
- Building a business in a new country or changing a supply chain takes time and strategic planning.
- The latest edition of the book by Koller does not address digital assets, as they are considered speculative investments.
- Stablecoins, tied to real-world assets like the US dollar, are not particularly interesting from a corporate valuation perspective.
- Misjudging market valuation dynamics can create a gap between how companies value themselves and how the market values them.
- Companies should be cautious of overvaluation, especially if driven by retail investors and emotions rather than financial analysis.
- Breaking up conglomerates into focused entities has been a positive trend, improving management effectiveness and investor appeal.
- Globalization of equity markets has increased over the years, leading to diversified shareholder bases and capital markets.
- Future finance might see AI enhancing company valuation practices, but the core principles of valuation and competitive advantage remain significant.
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