Intrinsic value of Manitowoc Company, Inc. (The) - MTW

Previous Close

$16.30

  Intrinsic Value

$1.76

stock screener

  Rating & Target

str. sell

-89%

Previous close

$16.30

 
Intrinsic value

$1.76

 
Up/down potential

-89%

 
Rating

str. sell

We calculate the intrinsic value of MTW 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.

STOCK VALUATION INPUT DATA

Revenue (in 0001), $M
Initial revenue growth rate, %
Terminal revenue growth rate, %
Revenue decline factor
Initial discount rate, %
Discount rate multiplier
Variable cost ratio, %
Fixed operating expenses, $M
Interest rate on debt, %
Effective corporate tax rate, %
Production assets / Revenue, %
Life of production assets, yrs
Working capital / Revenue, %
Revenue / Adjusted assets
Adjusted equity ratio
Cash flow adjustment, % of Revenue
Book value of equity, $M
Shares outstanding, mln
Market capitalization, $bln 0.6

 

FINANCIAL STATEMENTS FORECAST and PRESENT VALUE CALCULATION

Fiscal year
   2
   3
   4
   5
   6
   7
   8
   9
   10
   11
   12
   13
   14
   15
   16
   17
   18
   19
   20
   21
   22
   23
   24
   25
   26
   27
   28
   29
   30
   31

INCOME STATEMENT

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Revenue growth rate, %
  7.00
  6.80
  6.62
  6.46
  6.31
  6.18
  6.06
  5.96
  5.86
  5.77
  5.70
  5.63
  5.56
  5.51
  5.46
  5.41
  5.37
  5.33
  5.30
  5.27
  5.24
  5.22
  5.20
  5.18
  5.16
  5.14
  5.13
  5.12
  5.10
  5.09
Revenue, $m
  1,976
  2,111
  2,250
  2,396
  2,547
  2,704
  2,868
  3,039
  3,217
  3,403
  3,597
  3,799
  4,011
  4,232
  4,463
  4,704
  4,957
  5,221
  5,498
  5,788
  6,091
  6,409
  6,742
  7,091
  7,457
  7,841
  8,243
  8,665
  9,107
  9,571
Variable operating expenses, $m
  1,964
  2,095
  2,231
  2,373
  2,521
  2,675
  2,835
  3,001
  3,175
  3,357
  3,511
  3,708
  3,915
  4,130
  4,356
  4,591
  4,838
  5,096
  5,366
  5,649
  5,945
  6,255
  6,580
  6,921
  7,278
  7,653
  8,045
  8,457
  8,888
  9,341
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
  1,964
  2,095
  2,231
  2,373
  2,521
  2,675
  2,835
  3,001
  3,175
  3,357
  3,511
  3,708
  3,915
  4,130
  4,356
  4,591
  4,838
  5,096
  5,366
  5,649
  5,945
  6,255
  6,580
  6,921
  7,278
  7,653
  8,045
  8,457
  8,888
  9,341
Operating income, $m
  12
  16
  19
  22
  26
  30
  34
  38
  42
  47
  86
  91
  96
  102
  107
  113
  119
  125
  132
  139
  146
  154
  162
  170
  179
  188
  198
  208
  219
  230
EBITDA, $m
  75
  80
  86
  91
  97
  103
  109
  116
  122
  129
  137
  145
  153
  161
  170
  179
  189
  199
  209
  220
  232
  244
  256
  270
  284
  298
  314
  330
  346
  364
Interest expense (income), $m
  50
  39
  48
  58
  68
  79
  90
  101
  113
  126
  139
  152
  166
  181
  197
  213
  229
  247
  265
  285
  305
  326
  348
  371
  395
  421
  448
  475
  505
  535
  568
Earnings before tax, $m
  -27
  -33
  -39
  -46
  -53
  -60
  -68
  -76
  -84
  -92
  -66
  -75
  -85
  -95
  -106
  -117
  -128
  -140
  -153
  -166
  -180
  -194
  -209
  -225
  -242
  -259
  -278
  -297
  -317
  -338
Tax expense, $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
Net income, $m
  -27
  -33
  -39
  -46
  -53
  -60
  -68
  -76
  -84
  -92
  -66
  -75
  -85
  -95
  -106
  -117
  -128
  -140
  -153
  -166
  -180
  -194
  -209
  -225
  -242
  -259
  -278
  -297
  -317
  -338

BALANCE SHEET

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Cash and short-term investments, $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 assets, $m
  1,650
  1,762
  1,878
  2,000
  2,126
  2,257
  2,394
  2,537
  2,686
  2,841
  3,003
  3,171
  3,348
  3,532
  3,725
  3,927
  4,138
  4,358
  4,589
  4,831
  5,085
  5,350
  5,628
  5,919
  6,225
  6,545
  6,881
  7,233
  7,602
  7,989
Adjusted assets (=assets-cash), $m
  1,650
  1,762
  1,878
  2,000
  2,126
  2,257
  2,394
  2,537
  2,686
  2,841
  3,003
  3,171
  3,348
  3,532
  3,725
  3,927
  4,138
  4,358
  4,589
  4,831
  5,085
  5,350
  5,628
  5,919
  6,225
  6,545
  6,881
  7,233
  7,602
  7,989
Revenue / Adjusted assets
  1.198
  1.198
  1.198
  1.198
  1.198
  1.198
  1.198
  1.198
  1.198
  1.198
  1.198
  1.198
  1.198
  1.198
  1.198
  1.198
  1.198
  1.198
  1.198
  1.198
  1.198
  1.198
  1.198
  1.198
  1.198
  1.198
  1.198
  1.198
  1.198
  1.198
Average production assets, $m
  530
  566
  603
  642
  683
  725
  769
  815
  862
  912
  964
  1,018
  1,075
  1,134
  1,196
  1,261
  1,328
  1,399
  1,473
  1,551
  1,632
  1,718
  1,807
  1,900
  1,999
  2,101
  2,209
  2,322
  2,441
  2,565
Working capital, $m
  206
  220
  234
  249
  265
  281
  298
  316
  335
  354
  374
  395
  417
  440
  464
  489
  516
  543
  572
  602
  633
  667
  701
  737
  776
  815
  857
  901
  947
  995
Total debt, $m
  339
  407
  478
  552
  629
  710
  793
  880
  971
  1,065
  1,164
  1,267
  1,375
  1,487
  1,605
  1,728
  1,856
  1,991
  2,132
  2,280
  2,434
  2,596
  2,766
  2,943
  3,130
  3,325
  3,530
  3,744
  3,970
  4,206
Total liabilities, $m
  1,006
  1,075
  1,146
  1,220
  1,297
  1,377
  1,461
  1,548
  1,638
  1,733
  1,832
  1,935
  2,042
  2,155
  2,272
  2,395
  2,524
  2,659
  2,800
  2,947
  3,102
  3,263
  3,433
  3,611
  3,797
  3,992
  4,197
  4,412
  4,637
  4,873
Total equity, $m
  643
  687
  733
  780
  829
  880
  934
  989
  1,047
  1,108
  1,171
  1,237
  1,306
  1,378
  1,453
  1,531
  1,614
  1,700
  1,790
  1,884
  1,983
  2,086
  2,195
  2,309
  2,428
  2,552
  2,683
  2,821
  2,965
  3,116
Total liabilities and equity, $m
  1,649
  1,762
  1,879
  2,000
  2,126
  2,257
  2,395
  2,537
  2,685
  2,841
  3,003
  3,172
  3,348
  3,533
  3,725
  3,926
  4,138
  4,359
  4,590
  4,831
  5,085
  5,349
  5,628
  5,920
  6,225
  6,544
  6,880
  7,233
  7,602
  7,989
Debt-to-equity ratio
  0.530
  0.590
  0.650
  0.710
  0.760
  0.810
  0.850
  0.890
  0.930
  0.960
  0.990
  1.020
  1.050
  1.080
  1.100
  1.130
  1.150
  1.170
  1.190
  1.210
  1.230
  1.240
  1.260
  1.270
  1.290
  1.300
  1.320
  1.330
  1.340
  1.350
Adjusted equity ratio
  0.390
  0.390
  0.390
  0.390
  0.390
  0.390
  0.390
  0.390
  0.390
  0.390
  0.390
  0.390
  0.390
  0.390
  0.390
  0.390
  0.390
  0.390
  0.390
  0.390
  0.390
  0.390
  0.390
  0.390
  0.390
  0.390
  0.390
  0.390
  0.390
  0.390

CASH FLOW

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net income, $m
  -27
  -33
  -39
  -46
  -53
  -60
  -68
  -76
  -84
  -92
  -66
  -75
  -85
  -95
  -106
  -117
  -128
  -140
  -153
  -166
  -180
  -194
  -209
  -225
  -242
  -259
  -278
  -297
  -317
  -338
Depreciation, amort., depletion, $m
  63
  65
  67
  69
  71
  73
  75
  78
  80
  83
  50
  53
  56
  59
  63
  66
  70
  73
  77
  81
  85
  90
  95
  100
  105
  110
  116
  122
  128
  134
Funds from operations, $m
  36
  32
  27
  23
  18
  13
  8
  2
  -3
  -9
  -16
  -22
  -29
  -36
  -43
  -51
  -59
  -67
  -76
  -85
  -94
  -104
  -115
  -126
  -137
  -149
  -162
  -175
  -189
  -204
Change in working capital, $m
  13
  14
  15
  15
  16
  16
  17
  18
  19
  19
  20
  21
  22
  23
  24
  25
  26
  27
  29
  30
  32
  33
  35
  36
  38
  40
  42
  44
  46
  48
Cash from operations, $m
  23
  18
  13
  8
  2
  -4
  -9
  -16
  -22
  -29
  -36
  -43
  -51
  -59
  -67
  -76
  -85
  -94
  -104
  -115
  -126
  -137
  -149
  -162
  -175
  -189
  -204
  -219
  -235
  -252
Maintenance CAPEX, $m
  -26
  -28
  -30
  -32
  -34
  -36
  -38
  -40
  -43
  -45
  -48
  -50
  -53
  -56
  -59
  -63
  -66
  -70
  -73
  -77
  -81
  -85
  -90
  -95
  -100
  -105
  -110
  -116
  -122
  -128
New CAPEX, $m
  -35
  -36
  -37
  -39
  -41
  -42
  -44
  -46
  -48
  -50
  -52
  -54
  -57
  -59
  -62
  -65
  -68
  -71
  -74
  -78
  -81
  -85
  -89
  -94
  -98
  -103
  -108
  -113
  -119
  -124
Cash from investing activities, $m
  -61
  -64
  -67
  -71
  -75
  -78
  -82
  -86
  -91
  -95
  -100
  -104
  -110
  -115
  -121
  -128
  -134
  -141
  -147
  -155
  -162
  -170
  -179
  -189
  -198
  -208
  -218
  -229
  -241
  -252
Free cash flow, $m
  -38
  -46
  -54
  -63
  -72
  -81
  -91
  -102
  -112
  -124
  -135
  -148
  -161
  -174
  -188
  -203
  -219
  -235
  -252
  -270
  -288
  -308
  -329
  -350
  -373
  -397
  -422
  -448
  -475
  -504
Issuance/(repayment) of debt, $m
  66
  68
  71
  74
  77
  80
  83
  87
  91
  95
  99
  103
  108
  112
  118
  123
  129
  135
  141
  148
  155
  162
  170
  178
  186
  195
  205
  215
  225
  236
Issuance/(repurchase) of shares, $m
  69
  77
  85
  93
  102
  111
  121
  131
  142
  153
  129
  141
  154
  167
  181
  195
  210
  226
  243
  260
  279
  298
  318
  339
  361
  384
  409
  434
  461
  489
Cash from financing (excl. dividends), $m  
  135
  145
  156
  167
  179
  191
  204
  218
  233
  248
  228
  244
  262
  279
  299
  318
  339
  361
  384
  408
  434
  460
  488
  517
  547
  579
  614
  649
  686
  725
Total cash flow (excl. dividends), $m
  96
  99
  102
  104
  107
  110
  113
  117
  120
  124
  92
  97
  101
  105
  110
  115
  120
  126
  132
  138
  145
  152
  159
  166
  174
  183
  192
  201
  211
  221
Retained Cash Flow (-), $m
  -69
  -77
  -85
  -93
  -102
  -111
  -121
  -131
  -142
  -153
  -129
  -141
  -154
  -167
  -181
  -195
  -210
  -226
  -243
  -260
  -279
  -298
  -318
  -339
  -361
  -384
  -409
  -434
  -461
  -489
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
  28
  23
  17
  11
  5
  -1
  -8
  -15
  -22
  -29
  -37
  -45
  -53
  -62
  -71
  -80
  -90
  -100
  -111
  -122
  -134
  -146
  -159
  -172
  -187
  -201
  -217
  -233
  -250
  -268
Discount rate, %
  6.40
  6.72
  7.06
  7.41
  7.78
  8.17
  8.58
  9.01
  9.46
  9.93
  10.42
  10.95
  11.49
  12.07
  12.67
  13.31
  13.97
  14.67
  15.40
  16.17
  16.98
  17.83
  18.72
  19.66
  20.64
  21.67
  22.76
  23.89
  25.09
  26.34
PV of cash for distribution, $m
  26
  20
  14
  8
  3
  -1
  -4
  -7
  -10
  -11
  -12
  -13
  -13
  -12
  -12
  -11
  -10
  -9
  -7
  -6
  -5
  -4
  -3
  -2
  -2
  -1
  -1
  -1
  0
  0
Current shareholders' claim on cash, %
  89.4
  79.6
  70.6
  62.3
  54.9
  48.2
  42.2
  36.8
  32.1
  27.8
  24.8
  22.1
  19.6
  17.3
  15.2
  13.4
  11.7
  10.2
  8.9
  7.7
  6.7
  5.8
  5.0
  4.3
  3.7
  3.2
  2.7
  2.3
  2.0
  1.7

The Manitowoc Company, Inc. is a provider of engineered lifting equipment for the construction industry. The Company operates through the Crane business segment. It designs, manufactures and distributes a line of crawler-mounted lattice-boom cranes, which it sells under the Manitowoc brand name. It also designs and manufactures a line of top-slewing and self-erecting tower cranes, which it sells under the Potain brand name. It designs and manufactures mobile telescopic cranes, which it sells under the Grove brand name and a line of hydraulically powered telescopic boom trucks, which it sells under the National Crane brand name. It also provides crane product parts and services and crane rebuilding, remanufacturing and training services, which are delivered under the Manitowoc Crane Care brand name. Its crane products are used in a range of applications, including energy production/distribution and utilities, petrochemical and industrial projects, and infrastructure applications.

FINANCIAL RATIOS  of  Manitowoc Company, Inc. (The) (MTW)

Valuation Ratios
P/E Ratio -1.5
Price to Sales 0.4
Price to Book 1
Price to Tangible Book
Price to Cash Flow -3.3
Price to Free Cash Flow -2.6
Growth Rates
Sales Growth Rate -13.6%
Sales - 3 Yr. Growth Rate %
EPS Growth Rate %
EPS - 3 Yr. Growth Rate %
Capital Spending Gr. Rate -16.4%
Cap. Spend. - 3 Yr. Gr. Rate -16.2%
Financial Strength
Quick Ratio 6
Current Ratio 0.1
LT Debt to Equity 45.7%
Total Debt to Equity 47.7%
Interest Coverage -4
Management Effectiveness
Return On Assets -12.1%
Ret/ On Assets - 3 Yr. Avg. -1.5%
Return On Total Capital -24.2%
Ret/ On T. Cap. - 3 Yr. Avg. -5%
Return On Equity -52.5%
Return On Equity - 3 Yr. Avg. -8.9%
Asset Turnover 0.6
Profitability Ratios
Gross Margin 15.7%
Gross Margin - 3 Yr. Avg. 17.9%
EBITDA Margin -10.5%
EBITDA Margin - 3 Yr. Avg. -0.6%
Operating Margin -14.3%
Oper. Margin - 3 Yr. Avg. -3.8%
Pre-Tax Margin -16.6%
Pre-Tax Margin - 3 Yr. Avg. -7.8%
Net Profit Margin -23.3%
Net Profit Margin - 3 Yr. Avg. -4.5%
Effective Tax Rate -37.7%
Eff/ Tax Rate - 3 Yr. Avg. 28.1%
Payout Ratio 0%

MTW stock valuation input parameters

Revenue. Company's revenue (or sales) is always the starting point of any cash flow forecast. In the MTW stock intrinsic value calculation we used $1847 million for the last fiscal year's total revenue generated by Manitowoc Company, Inc. (The). The default revenue input number comes from 0001 income statement of Manitowoc Company, Inc. (The). 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 MTW stock valuation model: a) initial revenue growth rate of 7% 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 6.4%, whose default value for MTW is calculated based on our internal credit rating of Manitowoc Company, Inc. (The), 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 Manitowoc Company, Inc. (The).
    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 MTW stock the variable cost ratio is equal to 99.5%.

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 MTW 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 14.3% for Manitowoc Company, Inc. (The).

Corporate tax rate of 27% is the nominal tax rate for Manitowoc Company, Inc. (The). 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 MTW 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 MTW are equal to 26.8%.

Life of production assets of 19.1 years is the average useful life of capital assets used in Manitowoc Company, Inc. (The) 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 MTW is equal to 10.4%. 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 - $601.3 million for Manitowoc Company, Inc. (The) - 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 35.603 million for Manitowoc Company, Inc. (The) 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 Manitowoc Company, Inc. (The) at the current share price and the inputted number of shares is $0.6 billion.

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