TD's target priceOne of the best ways to determine the value of a stock is the find it's intrinsic value, TD does so with NAV.
TD uses a NAV approach, from there the EV/sales multiple
is what it is, 9.9 X based on 2022. So instead of arbitrarily assigning a EV/sales multiple, they use a NAV approach then work out what the EV/sales multiple is.
From TD's full report;
"NAV Calculation: We calculate a value of $12.53/share that we believe is representative of Xebec’s intrinsic value in a scenario contemplating the commercialization of hydrogen and the continued development of RNG infrastructure.
Implied Multiples: Our NAV equates to 2021E EV/Sales and EV/EBITDAS multiples of 9.9x and 102.8x, respectively.
Our target price is based on a 1.0x NAV multiple and our NAV implies a target price of $12.50."