What is a 'football field' valuation chart and how do analysts construct one?

A football field chart (named for its resemblance to an American football field's yard lines) is a horizontal bar chart that displays the range of values produced by different valuation methodologies on a single axis, making it easy to see where they overlap.

How to Construct One:

For each methodology, you compute a low, base, and high estimate, typically by varying key assumptions (growth rate, discount rate, multiple).

Example — Waverly Technologies (fictional):

Each method becomes a horizontal bar spanning from Low to High, with the Base case often marked.

What It Tells You:

1. Consensus Zone: Where multiple bars overlap is the most defensible valuation range. For Waverly, the $26-$30 range has the most overlap across methods.
2. Outlier Methods: If one method is far from others (DDM at $18 low), it may reflect model-specific assumptions (e.g., low payout ratio depressing DDM value).
3. Negotiation Anchor: In M&A, the overlap zone often becomes the starting point for price negotiation.
4. Sensitivity Transparency: Wide bars indicate high sensitivity to assumptions; narrow bars indicate more precision.

Construction Steps:

1. Run 3-5 independent valuation approaches
2. For each, perform sensitivity analysis on 1-2 key inputs
3. Record the 10th percentile (Low), median (Base), and 90th percentile (High)
4. Plot horizontal bars on a common $/share axis
5. Highlight the overlap zone

Exam Tip: The CFA exam tests whether you understand the purpose of triangulating across multiple methods. A football field chart is not itself an exam calculation, but the concept of valuation range convergence across methods is heavily tested.

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