Intrinsic value of Hyster-Yale Materials Handling - HY

Previous Close

$80.02

  Intrinsic Value

$58.82

stock screener

  Rating & Target

sell

-26%

Previous close

$80.02

 
Intrinsic value

$58.82

 
Up/down potential

-26%

 
Rating

sell

*Intrinsic value change (in %) minus stock price change (in %) in the past 12 months.

We calculate the intrinsic value of HY stock by summing up the current values of future distributable cash flows generated by the company and dividing the sum by the number of outstanding shares. As such, the intrinsic value calculation depends entirely on projections. The more accurate your projections of the company's performance are - the more reliable is the intrinsic value calculation result. Please make sure to check the stock valuation input data below and adjust it if necessary. The quality of the output (intrinsic valuation result) is only as good as the quality of the input. See also DISCLAIMERS.

Please visit our new site that uses elements of artificial intelligence for stock valuation: artificial intelligence value of Hyster-Yale Materials Handling (HY) stock.

STOCK VALUATION INPUT DATA

Initial revenue growth rate, %
Terminal revenue growth rate, %
Revenue decline factor
Initial discount rate, %
Discount rate multiplier
Shares outstanding, mln

 

FINANCIAL STATEMENTS FORECAST and PRESENT VALUE CALCULATION

Fiscal year
2016(a)
   2017
   2018
   2019
   2020
   2021
   2022
   2023
   2024
   2025
   2026
   2027
   2028
   2029
   2030
   2031
   2032
   2033
   2034
   2035
   2036
   2037
   2038
   2039
   2040
   2041
   2042
   2043
   2044
   2045
   2046

INCOME STATEMENT

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Revenue growth rate, %
  -0.31
  9.90
  9.41
  8.97
  8.57
  8.21
  7.89
  7.60
  7.34
  7.11
  6.90
  6.71
  6.54
  6.38
  6.25
  6.12
  6.01
  5.91
  5.82
  5.74
  5.66
  5.60
  5.54
  5.48
  5.43
  5.39
  5.35
  5.32
  5.28
  5.26
  5.23
Revenue, $m
  2,570
  2,824
  3,090
  3,367
  3,656
  3,956
  4,269
  4,593
  4,931
  5,281
  5,645
  6,024
  6,418
  6,828
  7,254
  7,698
  8,161
  8,643
  9,146
  9,670
  10,218
  10,789
  11,387
  12,011
  12,664
  13,346
  14,061
  14,808
  15,591
  16,410
  17,269
Variable operating expenses, $m
 
  2,711
  2,966
  3,231
  3,508
  3,795
  4,095
  4,406
  4,729
  5,064
  5,413
  5,771
  6,148
  6,541
  6,950
  7,375
  7,818
  8,280
  8,762
  9,264
  9,789
  10,336
  10,909
  11,507
  12,132
  12,786
  13,470
  14,186
  14,936
  15,721
  16,544
Fixed operating expenses, $m
 
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
Total operating expenses, $m
  2,535
  2,711
  2,966
  3,231
  3,508
  3,795
  4,095
  4,406
  4,729
  5,064
  5,413
  5,771
  6,148
  6,541
  6,950
  7,375
  7,818
  8,280
  8,762
  9,264
  9,789
  10,336
  10,909
  11,507
  12,132
  12,786
  13,470
  14,186
  14,936
  15,721
  16,544
Operating income, $m
  35
  113
  125
  136
  148
  161
  174
  188
  202
  217
  232
  253
  269
  287
  305
  323
  343
  363
  384
  406
  429
  453
  478
  504
  532
  560
  590
  622
  655
  689
  725
EBITDA, $m
  74
  157
  172
  187
  203
  220
  238
  256
  274
  294
  314
  335
  357
  380
  404
  428
  454
  481
  509
  538
  569
  600
  634
  668
  705
  743
  782
  824
  868
  913
  961
Interest expense (income), $m
  2
  6
  9
  11
  14
  17
  21
  24
  27
  31
  35
  39
  43
  47
  51
  56
  60
  65
  70
  76
  81
  87
  93
  100
  106
  113
  120
  128
  136
  144
  153
Earnings before tax, $m
  38
  108
  116
  125
  134
  144
  154
  164
  175
  186
  197
  214
  227
  240
  253
  268
  282
  298
  314
  330
  348
  366
  385
  405
  426
  447
  470
  494
  519
  545
  572
Tax expense, $m
  -4
  29
  31
  34
  36
  39
  41
  44
  47
  50
  53
  58
  61
  65
  68
  72
  76
  80
  85
  89
  94
  99
  104
  109
  115
  121
  127
  133
  140
  147
  154
Net income, $m
  43
  79
  85
  91
  98
  105
  112
  120
  127
  136
  144
  156
  166
  175
  185
  195
  206
  217
  229
  241
  254
  267
  281
  295
  311
  326
  343
  360
  379
  398
  418

BALANCE SHEET

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Cash and short-term investments, $m
  43
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
Total assets, $m
  1,287
  1,367
  1,496
  1,630
  1,770
  1,915
  2,066
  2,223
  2,387
  2,556
  2,733
  2,916
  3,106
  3,305
  3,511
  3,726
  3,950
  4,183
  4,427
  4,681
  4,946
  5,222
  5,511
  5,814
  6,130
  6,460
  6,806
  7,168
  7,546
  7,943
  8,359
Adjusted assets (=assets-cash), $m
  1,244
  1,367
  1,496
  1,630
  1,770
  1,915
  2,066
  2,223
  2,387
  2,556
  2,733
  2,916
  3,106
  3,305
  3,511
  3,726
  3,950
  4,183
  4,427
  4,681
  4,946
  5,222
  5,511
  5,814
  6,130
  6,460
  6,806
  7,168
  7,546
  7,943
  8,359
Revenue / Adjusted assets
  2.066
  2.066
  2.066
  2.066
  2.066
  2.066
  2.066
  2.066
  2.066
  2.066
  2.065
  2.066
  2.066
  2.066
  2.066
  2.066
  2.066
  2.066
  2.066
  2.066
  2.066
  2.066
  2.066
  2.066
  2.066
  2.066
  2.066
  2.066
  2.066
  2.066
  2.066
Average production assets, $m
  250
  274
  300
  327
  355
  384
  414
  446
  478
  512
  548
  584
  623
  662
  704
  747
  792
  838
  887
  938
  991
  1,047
  1,105
  1,165
  1,228
  1,295
  1,364
  1,436
  1,512
  1,592
  1,675
Working capital, $m
  233
  350
  383
  418
  453
  491
  529
  570
  611
  655
  700
  747
  796
  847
  900
  955
  1,012
  1,072
  1,134
  1,199
  1,267
  1,338
  1,412
  1,489
  1,570
  1,655
  1,744
  1,836
  1,933
  2,035
  2,141
Total debt, $m
  211
  245
  326
  410
  498
  589
  683
  782
  884
  991
  1,101
  1,216
  1,336
  1,460
  1,590
  1,724
  1,865
  2,011
  2,164
  2,323
  2,489
  2,662
  2,844
  3,033
  3,231
  3,438
  3,655
  3,882
  4,120
  4,368
  4,629
Total liabilities, $m
  823
  857
  938
  1,022
  1,110
  1,201
  1,295
  1,394
  1,496
  1,603
  1,713
  1,828
  1,948
  2,072
  2,202
  2,336
  2,477
  2,623
  2,776
  2,935
  3,101
  3,274
  3,456
  3,645
  3,843
  4,050
  4,267
  4,494
  4,732
  4,980
  5,241
Total equity, $m
  464
  510
  558
  608
  660
  714
  771
  829
  890
  953
  1,019
  1,088
  1,159
  1,233
  1,310
  1,390
  1,473
  1,560
  1,651
  1,746
  1,845
  1,948
  2,056
  2,168
  2,286
  2,410
  2,539
  2,674
  2,815
  2,963
  3,118
Total liabilities and equity, $m
  1,287
  1,367
  1,496
  1,630
  1,770
  1,915
  2,066
  2,223
  2,386
  2,556
  2,732
  2,916
  3,107
  3,305
  3,512
  3,726
  3,950
  4,183
  4,427
  4,681
  4,946
  5,222
  5,512
  5,813
  6,129
  6,460
  6,806
  7,168
  7,547
  7,943
  8,359
Debt-to-equity ratio
  0.455
  0.480
  0.580
  0.670
  0.750
  0.820
  0.890
  0.940
  0.990
  1.040
  1.080
  1.120
  1.150
  1.180
  1.210
  1.240
  1.270
  1.290
  1.310
  1.330
  1.350
  1.370
  1.380
  1.400
  1.410
  1.430
  1.440
  1.450
  1.460
  1.470
  1.480
Adjusted equity ratio
  0.373
  0.373
  0.373
  0.373
  0.373
  0.373
  0.373
  0.373
  0.373
  0.373
  0.373
  0.373
  0.373
  0.373
  0.373
  0.373
  0.373
  0.373
  0.373
  0.373
  0.373
  0.373
  0.373
  0.373
  0.373
  0.373
  0.373
  0.373
  0.373
  0.373
  0.373

CASH FLOW

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net income, $m
  43
  79
  85
  91
  98
  105
  112
  120
  127
  136
  144
  156
  166
  175
  185
  195
  206
  217
  229
  241
  254
  267
  281
  295
  311
  326
  343
  360
  379
  398
  418
Depreciation, amort., depletion, $m
  39
  44
  47
  51
  55
  59
  63
  68
  72
  77
  82
  82
  88
  93
  99
  105
  111
  118
  125
  132
  140
  147
  156
  164
  173
  182
  192
  202
  213
  224
  236
Funds from operations, $m
  -157
  122
  132
  142
  153
  164
  175
  187
  200
  213
  226
  239
  253
  268
  284
  300
  318
  335
  354
  373
  393
  414
  437
  460
  484
  509
  535
  563
  592
  622
  654
Change in working capital, $m
  -108
  32
  33
  34
  36
  37
  39
  40
  42
  43
  45
  47
  49
  51
  53
  55
  57
  60
  62
  65
  68
  71
  74
  77
  81
  85
  89
  93
  97
  102
  106
Cash from operations, $m
  -49
  91
  99
  108
  117
  127
  137
  147
  158
  169
  181
  192
  204
  218
  231
  245
  260
  276
  292
  308
  326
  344
  362
  382
  403
  424
  447
  470
  495
  520
  547
Maintenance CAPEX, $m
  0
  -35
  -39
  -42
  -46
  -50
  -54
  -58
  -63
  -67
  -72
  -77
  -82
  -88
  -93
  -99
  -105
  -111
  -118
  -125
  -132
  -140
  -147
  -156
  -164
  -173
  -182
  -192
  -202
  -213
  -224
New CAPEX, $m
  -43
  -24
  -26
  -27
  -28
  -29
  -30
  -31
  -33
  -34
  -35
  -37
  -38
  -40
  -41
  -43
  -45
  -47
  -49
  -51
  -53
  -55
  -58
  -61
  -63
  -66
  -69
  -73
  -76
  -79
  -83
Cash from investing activities, $m
  -145
  -59
  -65
  -69
  -74
  -79
  -84
  -89
  -96
  -101
  -107
  -114
  -120
  -128
  -134
  -142
  -150
  -158
  -167
  -176
  -185
  -195
  -205
  -217
  -227
  -239
  -251
  -265
  -278
  -292
  -307
Free cash flow, $m
  -194
  32
  35
  39
  43
  48
  52
  57
  63
  68
  74
  78
  84
  90
  97
  103
  110
  117
  125
  132
  140
  149
  157
  166
  175
  185
  195
  205
  216
  228
  240
Issuance/(repayment) of debt, $m
  -16
  77
  81
  84
  88
  91
  95
  99
  102
  106
  111
  115
  120
  124
  129
  135
  140
  146
  153
  159
  166
  174
  181
  189
  198
  207
  217
  227
  238
  249
  261
Issuance/(repurchase) of shares, $m
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
Cash from financing (excl. dividends), $m  
  97
  77
  81
  84
  88
  91
  95
  99
  102
  106
  111
  115
  120
  124
  129
  135
  140
  146
  153
  159
  166
  174
  181
  189
  198
  207
  217
  227
  238
  249
  261
Total cash flow (excl. dividends), $m
  -93
  109
  115
  123
  131
  139
  147
  156
  165
  174
  184
  193
  203
  215
  226
  238
  251
  264
  277
  292
  306
  322
  338
  355
  373
  392
  412
  432
  454
  476
  500
Retained Cash Flow (-), $m
  -3
  -46
  -48
  -50
  -52
  -54
  -56
  -59
  -61
  -63
  -66
  -68
  -71
  -74
  -77
  -80
  -84
  -87
  -91
  -95
  -99
  -103
  -108
  -113
  -118
  -123
  -129
  -135
  -141
  -148
  -155
Prev. year cash balance distribution, $m
 
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
Cash flow adjustment, $m
 
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
Cash available for distribution, $m
 
  63
  67
  73
  79
  85
  91
  97
  104
  111
  118
  125
  132
  141
  149
  158
  167
  177
  186
  197
  208
  219
  231
  243
  256
  269
  283
  297
  313
  329
  345
Discount rate, %
 
  5.30
  5.57
  5.84
  6.14
  6.44
  6.76
  7.10
  7.46
  7.83
  8.22
  8.63
  9.06
  9.52
  9.99
  10.49
  11.02
  11.57
  12.15
  12.76
  13.39
  14.06
  14.77
  15.50
  16.28
  17.09
  17.95
  18.85
  19.79
  20.78
  21.82
PV of cash for distribution, $m
 
  60
  60
  61
  62
  62
  61
  60
  59
  56
  54
  50
  47
  43
  39
  35
  31
  27
  24
  20
  17
  14
  11
  9
  7
  5
  4
  3
  2
  1
  1
Current shareholders' claim on cash, %
  100
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0

Hyster-Yale Materials Handling, Inc. is a lift truck manufacturer. The Company designs, engineers, manufactures, sells and services a line of lift trucks, attachments and aftermarket parts marketed globally under the Hyster and Yale brand names, mainly to independent Hyster and Yale retail dealerships. The Company operates through five segments: the Americas, EMEA, JAPIC, Bolzoni and Nuvera. The Company offers a range of solutions, including attachments and hydrogen fuel cell power products, telematics, automation and fleet management services, as well as an array of other power options for its lift trucks. The Company's segments for the lift truck business include three management units: the Americas, EMEA and JAPIC. Americas includes operations in the United States, Canada, Mexico, Brazil, Latin America and its corporate headquarters. EMEA includes operations in Europe, the Middle East and Africa. JAPIC includes operations in the Asia and Pacific regions including China.

FINANCIAL RATIOS  of  Hyster-Yale Materials Handling (HY)

Valuation Ratios
P/E Ratio 30.5
Price to Sales 0.5
Price to Book 2.8
Price to Tangible Book
Price to Cash Flow -26.8
Price to Free Cash Flow -14.3
Growth Rates
Sales Growth Rate -0.3%
Sales - 3 Yr. Growth Rate %
EPS Growth Rate %
EPS - 3 Yr. Growth Rate %
Capital Spending Gr. Rate -8.5%
Cap. Spend. - 3 Yr. Gr. Rate 3.1%
Financial Strength
Quick Ratio 0
Current Ratio 0
LT Debt to Equity 17.7%
Total Debt to Equity 45.5%
Interest Coverage 20
Management Effectiveness
Return On Assets 3.8%
Ret/ On Assets - 3 Yr. Avg. 6.7%
Return On Total Capital 7.2%
Ret/ On T. Cap. - 3 Yr. Avg. 14.7%
Return On Equity 9.3%
Return On Equity - 3 Yr. Avg. 16.7%
Asset Turnover 2.2
Profitability Ratios
Gross Margin 16.7%
Gross Margin - 3 Yr. Avg. 16.5%
EBITDA Margin 3.1%
EBITDA Margin - 3 Yr. Avg. 4.9%
Operating Margin 1.4%
Oper. Margin - 3 Yr. Avg. 3.6%
Pre-Tax Margin 1.5%
Pre-Tax Margin - 3 Yr. Avg. 3.7%
Net Profit Margin 1.7%
Net Profit Margin - 3 Yr. Avg. 2.9%
Effective Tax Rate -10.5%
Eff/ Tax Rate - 3 Yr. Avg. 14.9%
Payout Ratio 44.2%

HY stock valuation input parameters

Revenue. Company's revenue (or sales) is always the starting point of any cash flow forecast. In the HY stock intrinsic value calculation we used $2570 million for the last fiscal year's total revenue generated by Hyster-Yale Materials Handling. The default revenue input number comes from 2016 income statement of Hyster-Yale Materials Handling. You may change it if you feel that it should be adjusted for some unusual circumstances that are not expected to be repeated in the future or if you already know (from interim financial statements, for example) that this year's revenue is going to be quite different.

Revenue growth rate. Forecasted future revenue growth rate is the most important input parameter for the intrinsic value calculation. Unlike other input parameters that are reasonably expected to be in line with their historic averages or their historic trends, the revenue growth rate by and large is a wild card: nobody really knows what the company's revenue will be in the future. Of course, the level of unpredictability is different for different industries (utility companies being the most predictable and, thus, less risky).
    We use three input parameters to forecast the revenue growth rate in our HY stock valuation model: a) initial revenue growth rate of 9.9% whose default value is the revenue growth rate in the most recent quarter compared to the quarterly revenue a year ago; b) terminal revenue growth rate of 5% whose default value is chosen to be close to the average nominal (i.e. not adjusted for inflation) GDP growth rate; and c) revenue decline factor of 0.9, which stipulates that revenue growth rate in each forecasted year will be equal to the difference of the revenue growth rate in the preceding year and the terminal revenue growth rate multiplied by this revenue decline factor (with the passage of time the revenue growth rate will be approaching the terminal revenue growth rate, but not quite reaching it - though the difference could be infinitesimally small).
    At the revenue decline factor of 1, the future revenue growth rate is forecasted to be constant and equal to the initial revenue growth rate. The smaller the revenue decline factor, the faster the revenue growth rate will approach the terminal revenue growth.

Discount rate. The discount rate is used for determining the present value of future cash flows: future cash flows are "discounted" as at normal conditions (that translate into positive expected return on investment) one dollar today is worth more than the same dollar in the future. Unlike all other valuation models, we use variable discount rate, i.e. it increases for each consecutive year. This is done to account for higher risk of cash flows coming in further in the future.
    The initial discount rate of 5.3%, whose default value for HY is calculated based on our internal credit rating of Hyster-Yale Materials Handling, is applied to the cash flow expected to be received a year from now (well, actually, to be precise, in the financial year following the base year - the last year for which we have financial statements). For each consecutive year the discount rate is multiplied by the discount rate multiplier of 1.05, e.i. each year it increases by 5%. Feel free to change this number to correspond to your level of risk assessment of Hyster-Yale Materials Handling.
    By the way, it is easy to set the discount rate to be constant (this would make comparison with other valuation models easier): just set the discount rate multiplier equal to 1 and chose the magnitude of the initial discount rate to your liking.

Variable cost ratio is the ratio of variable costs (i.e. costs that fluctuate with fluctuation of the volume of production) to the revenue expressed as a percentage. In the calculation of intrinsic value of HY stock the variable cost ratio is equal to 96%.

Fixed operating expenses is just that - expenses that are not dependant on the volume of production. They are set to $0 million in the base year in the intrinsic value calculation for HY stock. These expenses increase with the level of inflation in subsequent years.

Interest rate on debt is the average all-in rate of interest paid by the company on its debt. It is set at 3.5% for Hyster-Yale Materials Handling.

Corporate tax rate of 27% is the nominal tax rate for Hyster-Yale Materials Handling. In reality, companies find ways to pay much less taxes than that or not to pay them at all.

Cash flow adjustment could be used for any adjustment the investor deems necessary. Most commonly we use this field to account for stock options-related effects in excess of what is reported on the company's income statement. The cash flow adjustment is expressed as a percentage of the revenue, and in the current valuation of the HY stock is equal to 0%.

Production assets are the company's assets used for manufacturing products or provision of services. In the valuation model input table they are expressed as a percentage of revenue and for HY are equal to 9.7%.

Life of production assets of 7.1 years is the average useful life of capital assets used in Hyster-Yale Materials Handling operations. It is used to calculate yearly capital expenditures needed to keep these assets in good order - we call it the maintenance CAPEX.

Working capital is the difference between the company's current assets and liabilities. In the model we use the ratio of working capital to revenue, which for HY is equal to 12.4%. A negative number means that the company is apt at using financial resources of its suppliers and customers; a large positive number, on the other hand, means that it either provides in-kind financing to others or is not good at managing its inventories.

Book value of equity - $464 million for Hyster-Yale Materials Handling - is used in calculation of the "floor" for intrinsic valuation based on the discounted cash flow (DCF) method. Even if the prospects are very bad for a company, its assets could always be sold now for their current fair market value.

Shares outstanding of 16.792 million for Hyster-Yale Materials Handling is needed to calculate the intrinsic value of one share.

Market capitalization is used here only for reference purposes and as a quick check that the share price and the number of shares outstanding numbers are correct - something especially to be cognizant about at stock splits. So, the market capitalization of Hyster-Yale Materials Handling at the current share price and the inputted number of shares is $1.3 billion.

RELATED COMPANIES Price Int.Val. Rating
WNC Wabash Nationa 23.31 30.91  buy
TEX Terex 43.70 5.76  str.sell
HI Hillenbrand 45.15 52.84  hold

COMPANY NEWS

▶ Hyster-Yale Materials posts 3Q profit   [06:45AM  Associated Press]
▶ Hyster-Yale Gets a Big Bottom-Line Lift   [07:09AM  Motley Fool]
▶ Hyster-Yale Materials posts 2Q profit   [12:45AM  Associated Press]
▶ Hyster-Yale Starts 2017 Strong   [08:36AM  Motley Fool]
▶ Hyster-Yale Materials posts 1Q profit   [06:45AM  Associated Press]
▶ Yale Expands Driven by Balyo Robotic Lift Truck Lineup   [Mar-09-17 08:05AM  Marketwired]
▶ Hyster-Yale Loses Its Lift -- for Now   [Feb-28-17 06:57PM  Motley Fool]
▶ Hyster-Yale Loses Its Lift -- for Now   [06:57PM  at Motley Fool]
▶ Hyster-Yale Materials posts 4Q profit   [06:07PM  Associated Press]
Financial statements of HY
Follow us on:   twitter   twitter   twitter   twitter

ASSET ALLOCATION

About X-FIN       Site news       Privacy policy       Terms of use       FAQ

Copyright © X-FIN.com 2005-2018. All rigths reserved.