| Knorr-Bremse AG (DE000KBX1006) | |||
81,50 EURStand (close): 01.07.25 |
 |
||
Nachrichten |
||
| Datum / Uhrzeit | Titel | Bewertung |
| 15.04.25 10:37:56 | European Stocks Estimated To Be Trading Below Their Intrinsic Value In April 2025 |  |
| Amid escalating global trade tensions, European markets have experienced volatility, with major indices like the STOXX Europe 600 Index seeing declines as central banks heighten their vigilance. In such an environment, identifying stocks that are potentially trading below their intrinsic value can offer opportunities for investors seeking to capitalize on market inefficiencies. Top 10 Undervalued Stocks Based On Cash Flows In Europe Name Current Price Fair Value (Est) Discount (Est) Cenergy Holdings (ENXTBR:CENER) €8.19 €16.34 49.9% Mips (OM:MIPS) SEK351.00 SEK686.53 48.9% LPP (WSE:LPP) PLN15785.00 PLN30693.52 48.6% Lindab International (OM:LIAB) SEK185.90 SEK370.29 49.8% Net Insight (OM:NETI B) SEK4.61 SEK9.05 49.1% TF Bank (OM:TFBANK) SEK344.50 SEK668.98 48.5% Schaeffler (XTRA:SHA0) €3.558 €7.06 49.6% Digital Workforce Services Oyj (HLSE:DWF) €3.59 €7.00 48.7% Komplett (OB:KOMPL) NOK11.50 NOK22.68 49.3% 3U Holding (XTRA:UUU) €1.435 €2.77 48.2% Click here to see the full list of 182 stocks from our Undervalued European Stocks Based On Cash Flows screener. Let's uncover some gems from our specialized screener. RENK Group Overview: RENK Group AG specializes in designing, engineering, producing, testing, and servicing customized drive systems globally and has a market cap of €4.78 billion. Operations: The company's revenue is derived from three main segments: Slide Bearings (€124.82 million), Marine & Industry (€329.82 million), and Vehicle Mobility Solutions (€699.00 million). Estimated Discount To Fair Value: 44.4% RENK Group is trading at €47.81, significantly below its estimated fair value of €85.9, indicating potential undervaluation based on cash flows. The company reported strong earnings growth with net income rising to €53.32 million from €32.31 million year-over-year and is expected to see significant annual profit growth over the next three years, outpacing the German market average. However, it carries a high level of debt and has experienced share price volatility recently. According our earnings growth report, there's an indication that RENK Group might be ready to expand. Dive into the specifics of RENK Group here with our thorough financial health report.DB:R3NK Discounted Cash Flow as at Apr 2025 NIBE Industrier Overview: NIBE Industrier AB (publ) is a company that develops, manufactures, markets, and sells energy-efficient solutions for indoor climate comfort and intelligent heating and control components across the Nordic countries, Europe, North America, and internationally with a market capitalization of approximately SEK71.53 billion. Operations: NIBE Industrier's revenue segments include Climate Solutions at SEK26.04 billion, Element at SEK11.09 billion, and Stoves at SEK3.86 billion. Story Continues Estimated Discount To Fair Value: 10.6% NIBE Industrier, trading at SEK 35.48, is slightly undervalued compared to its fair value estimate of SEK 39.7. Despite a drop in net income to SEK 1.17 billion from SEK 4.79 billion year-over-year, earnings are projected to grow significantly at 27.38% annually over the next three years, surpassing the Swedish market average growth rate of 13.4%. However, profit margins have decreased from last year's figures and interest payments remain poorly covered by earnings. Our earnings growth report unveils the potential for significant increases in NIBE Industrier's future results. Unlock comprehensive insights into our analysis of NIBE Industrier stock in this financial health report.OM:NIBE B Discounted Cash Flow as at Apr 2025 Knorr-Bremse Overview: Knorr-Bremse AG, with a market cap of €12.66 billion, develops, produces, and markets braking and other systems for rail and commercial vehicles globally. Operations: The company's revenue is primarily derived from its Rail Vehicle Systems segment, generating €4.13 billion, and its Commercial Vehicle Systems segment, contributing €3.91 billion. Estimated Discount To Fair Value: 36.4% Knorr-Bremse, trading at €78.55, is significantly undervalued with a fair value estimate of €123.48. Earnings are forecast to grow at 20.5% annually, outpacing the German market's growth rate of 15.8%. Despite stable revenue projections of €8.1 billion to €8.4 billion for 2025 and an EBIT margin between 12.5% and 13.5%, net income has declined from the previous year, and its dividend track record remains unstable despite recent increases. Our expertly prepared growth report on Knorr-Bremse implies its future financial outlook may be stronger than recent results. Click here and access our complete balance sheet health report to understand the dynamics of Knorr-Bremse.XTRA:KBX Discounted Cash Flow as at Apr 2025 Summing It All Up Reveal the 182 hidden gems among our Undervalued European Stocks Based On Cash Flows screener with a single click here. Already own these companies? Bring clarity to your investment decisions by linking up your portfolio with Simply Wall St, where you can monitor all the vital signs of your stocks effortlessly. Simply Wall St is your key to unlocking global market trends, a free user-friendly app for forward-thinking investors. Want To Explore Some Alternatives? Explore high-performing small cap companies that haven't yet garnered significant analyst attention. Diversify your portfolio with solid dividend payers offering reliable income streams to weather potential market turbulence. Fuel your portfolio with companies showing strong growth potential, backed by optimistic outlooks both from analysts and management. This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned. Companies discussed in this article include DB:R3NK OM:NIBE B and XTRA:KBX. Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team@simplywallst.com View Comments |
||
| 09.04.25 04:24:14 | Is Now The Time To Look At Buying Knorr-Bremse AG (ETR:KBX)? |  |
| Let's talk about the popular Knorr-Bremse AG (ETR:KBX). The company's shares saw a double-digit share price rise of over 10% in the past couple of months on the XTRA. Shareholders may appreciate the recent price jump, but the company still has a way to go before reaching its yearly highs again. With many analysts covering the large-cap stock, we may expect any price-sensitive announcements have already been factored into the stock’s share price. But what if there is still an opportunity to buy? Today we will analyse the most recent data on Knorr-Bremse’s outlook and valuation to see if the opportunity still exists. We've found 21 US stocks that are forecast to pay a dividend yield of over 6% next year. See the full list for free. What Is Knorr-Bremse Worth? Great news for investors – Knorr-Bremse is still trading at a fairly cheap price. Our valuation model shows that the intrinsic value for the stock is €123.80, which is above what the market is valuing the company at the moment. This indicates a potential opportunity to buy low. What’s more interesting is that, Knorr-Bremse’s share price is quite volatile, which gives us more chances to buy since the share price could sink lower (or rise higher) in the future. This is based on its high beta, which is a good indicator for how much the stock moves relative to the rest of the market. View our latest analysis for Knorr-Bremse What does the future of Knorr-Bremse look like?XTRA:KBX Earnings and Revenue Growth April 9th 2025 Future outlook is an important aspect when you’re looking at buying a stock, especially if you are an investor looking for growth in your portfolio. Buying a great company with a robust outlook at a cheap price is always a good investment, so let’s also take a look at the company's future expectations. With profit expected to grow by 94% over the next couple of years, the future seems bright for Knorr-Bremse. It looks like higher cash flow is on the cards for the stock, which should feed into a higher share valuation. What This Means For You Are you a shareholder? Since KBX is currently undervalued, it may be a great time to increase your holdings in the stock. With a positive outlook on the horizon, it seems like this growth has not yet been fully factored into the share price. However, there are also other factors such as financial health to consider, which could explain the current undervaluation. Are you a potential investor? If you’ve been keeping an eye on KBX for a while, now might be the time to make a leap. Its prosperous future outlook isn’t fully reflected in the current share price yet, which means it’s not too late to buy KBX. But before you make any investment decisions, consider other factors such as the strength of its balance sheet, in order to make a well-informed buy. Story Continues So while earnings quality is important, it's equally important to consider the risks facing Knorr-Bremse at this point in time. You'd be interested to know, that we found 1 warning sign for Knorr-Bremse and you'll want to know about this. If you are no longer interested in Knorr-Bremse, you can use our free platform to see our list of over 50 other stocks with a high growth potential. Have feedback on this article? Concerned about the content?Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com. This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned. View Comments |
||
| 24.03.25 06:55:12 | Knorr-Bremse (ETR:KBX) Is Increasing Its Dividend To €1.75 | |
| Knorr-Bremse AG (ETR:KBX) has announced that it will be increasing its periodic dividend on the 6th of May to €1.75, which will be 6.7% higher than last year's comparable payment amount of €1.64. Although the dividend is now higher, the yield is only 1.9%, which is below the industry average. Knorr-Bremse's Future Dividend Projections Appear Well Covered By Earnings If it is predictable over a long period, even low dividend yields can be attractive. The last dividend was quite easily covered by Knorr-Bremse's earnings. This indicates that quite a large proportion of earnings is being invested back into the business. Over the next year, EPS is forecast to expand by 96.1%. If the dividend continues on this path, the payout ratio could be 31% by next year, which we think can be pretty sustainable going forward.XTRA:KBX Historic Dividend March 24th 2025 Check out our latest analysis for Knorr-Bremse Knorr-Bremse's Dividend Has Lacked Consistency Even in its relatively short history, the company has reduced the dividend at least once. Due to this, we are a little bit cautious about the dividend consistency over a full economic cycle. The dividend has gone from an annual total of €1.75 in 2019 to the most recent total annual payment of €1.64. Doing the maths, this is a decline of about 1.1% per year. Generally, we don't like to see a dividend that has been declining over time as this can degrade shareholders' returns and indicate that the company may be running into problems. Dividend Growth May Be Hard To Come By With a relatively unstable dividend, it's even more important to see if earnings per share is growing. It's not great to see that Knorr-Bremse's earnings per share has fallen at approximately 5.4% per year over the past five years. A modest decline in earnings isn't great, and it makes it quite unlikely that the dividend will grow in the future unless that trend can be reversed. Earnings are forecast to grow over the next 12 months and if that happens we could still be a little bit cautious until it becomes a pattern. In Summary Overall, we always like to see the dividend being raised, but we don't think Knorr-Bremse will make a great income stock. The payments haven't been particularly stable and we don't see huge growth potential, but with the dividend well covered by cash flows it could prove to be reliable over the short term. We don't think Knorr-Bremse is a great stock to add to your portfolio if income is your focus. Investors generally tend to favour companies with a consistent, stable dividend policy as opposed to those operating an irregular one. Meanwhile, despite the importance of dividend payments, they are not the only factors our readers should know when assessing a company. For instance, we've picked out 1 warning sign for Knorr-Bremse that investors should take into consideration. Is Knorr-Bremse not quite the opportunity you were looking for? Why not check out our selection of top dividend stocks. Have feedback on this article? Concerned about the content?Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com. This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned. View Comments |
||
| 23.03.25 06:51:38 | Knorr-Bremse AG Just Missed Earnings - But Analysts Have Updated Their Models | |
| Last week, you might have seen that Knorr-Bremse AG (ETR:KBX) released its full-year result to the market. The early response was not positive, with shares down 4.1% to €88.45 in the past week. It was not a great result overall. While revenues of €8.0b were in line with analyst predictions, earnings were less than expected, missing statutory estimates by 12% to hit €2.77 per share. The analysts typically update their forecasts at each earnings report, and we can judge from their estimates whether their view of the company has changed or if there are any new concerns to be aware of. Readers will be glad to know we've aggregated the latest statutory forecasts to see whether the analysts have changed their mind on Knorr-Bremse after the latest results. AI is about to change healthcare. These 20 stocks are working on everything from early diagnostics to drug discovery. The best part - they are all under $10bn in marketcap - there is still time to get in early.XTRA:KBX Earnings and Revenue Growth March 23rd 2025 Taking into account the latest results, the consensus forecast from Knorr-Bremse's 13 analysts is for revenues of €8.24b in 2025. This reflects a satisfactory 3.1% improvement in revenue compared to the last 12 months. Per-share earnings are expected to soar 53% to €4.21. Yet prior to the latest earnings, the analysts had been anticipated revenues of €8.28b and earnings per share (EPS) of €4.20 in 2025. So it's pretty clear that, although the analysts have updated their estimates, there's been no major change in expectations for the business following the latest results. View our latest analysis for Knorr-Bremse The analysts reconfirmed their price target of €84.47, showing that the business is executing well and in line with expectations. The consensus price target is just an average of individual analyst targets, so - it could be handy to see how wide the range of underlying estimates is. The most optimistic Knorr-Bremse analyst has a price target of €107 per share, while the most pessimistic values it at €60.00. There are definitely some different views on the stock, but the range of estimates is not wide enough as to imply that the situation is unforecastable, in our view. Looking at the bigger picture now, one of the ways we can make sense of these forecasts is to see how they measure up against both past performance and industry growth estimates. It's pretty clear that there is an expectation that Knorr-Bremse's revenue growth will slow down substantially, with revenues to the end of 2025 expected to display 3.1% growth on an annualised basis. This is compared to a historical growth rate of 5.4% over the past five years. By way of comparison, the other companies in this industry with analyst coverage are forecast to grow their revenue at 4.8% per year. So it's pretty clear that, while revenue growth is expected to slow down, the wider industry is also expected to grow faster than Knorr-Bremse. Story Continues The Bottom Line The most important thing to take away is that there's been no major change in sentiment, with the analysts reconfirming that the business is performing in line with their previous earnings per share estimates. On the plus side, there were no major changes to revenue estimates; although forecasts imply they will perform worse than the wider industry. There was no real change to the consensus price target, suggesting that the intrinsic value of the business has not undergone any major changes with the latest estimates. Keeping that in mind, we still think that the longer term trajectory of the business is much more important for investors to consider. At Simply Wall St, we have a full range of analyst estimates for Knorr-Bremse going out to 2027, and you can see them free on our platform here.. You still need to take note of risks, for example - Knorr-Bremse has 1 warning sign we think you should be aware of. Have feedback on this article? Concerned about the content?Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com. This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned. View Comments |
||
| 14.03.25 08:09:16 | Knorr-Bremse AG's (ETR:KBX) Stock On An Uptrend: Could Fundamentals Be Driving The Momentum? | |
| Most readers would already be aware that Knorr-Bremse's (ETR:KBX) stock increased significantly by 27% over the past three months. As most would know, fundamentals are what usually guide market price movements over the long-term, so we decided to look at the company's key financial indicators today to determine if they have any role to play in the recent price movement. In this article, we decided to focus on Knorr-Bremse's ROE. Return on equity or ROE is an important factor to be considered by a shareholder because it tells them how effectively their capital is being reinvested. In simpler terms, it measures the profitability of a company in relation to shareholder's equity. See our latest analysis for Knorr-Bremse How Do You Calculate Return On Equity? Return on equity can be calculated by using the formula: Return on Equity = Net Profit (from continuing operations) ÷ Shareholders' Equity So, based on the above formula, the ROE for Knorr-Bremse is: 15% = €477m ÷ €3.1b (Based on the trailing twelve months to December 2024). The 'return' is the income the business earned over the last year. One way to conceptualize this is that for each €1 of shareholders' capital it has, the company made €0.15 in profit. What Has ROE Got To Do With Earnings Growth? So far, we've learned that ROE is a measure of a company's profitability. We now need to evaluate how much profit the company reinvests or "retains" for future growth which then gives us an idea about the growth potential of the company. Assuming all else is equal, companies that have both a higher return on equity and higher profit retention are usually the ones that have a higher growth rate when compared to companies that don't have the same features. Knorr-Bremse's Earnings Growth And 15% ROE To begin with, Knorr-Bremse seems to have a respectable ROE. Further, the company's ROE compares quite favorably to the industry average of 10%. However, we are curious as to how the high returns still resulted in flat growth for Knorr-Bremse in the past five years. We reckon that there could be some other factors at play here that's limiting the company's growth. These include low earnings retention or poor allocation of capital. As a next step, we compared Knorr-Bremse's net income growth with the industry and discovered that the industry saw an average growth of 17% in the same period.XTRA:KBX Past Earnings Growth March 14th 2025 The basis for attaching value to a company is, to a great extent, tied to its earnings growth. It’s important for an investor to know whether the market has priced in the company's expected earnings growth (or decline). This then helps them determine if the stock is placed for a bright or bleak future. Has the market priced in the future outlook for KBX? You can find out in our latest intrinsic value infographic research report. Story Continues Is Knorr-Bremse Making Efficient Use Of Its Profits? Despite having a normal three-year median payout ratio of 48% (implying that the company keeps 52% of its income) over the last three years, Knorr-Bremse has seen a negligible amount of growth in earnings as we saw above. So there might be other factors at play here which could potentially be hampering growth. For example, the business has faced some headwinds. In addition, Knorr-Bremse has been paying dividends over a period of six years suggesting that keeping up dividend payments is way more important to the management even if it comes at the cost of business growth. Our latest analyst data shows that the future payout ratio of the company over the next three years is expected to be approximately 48%. Still, forecasts suggest that Knorr-Bremse's future ROE will rise to 20% even though the the company's payout ratio is not expected to change by much. Conclusion On the whole, we do feel that Knorr-Bremse has some positive attributes. Yet, the low earnings growth is a bit concerning, especially given that the company has a high rate of return and is reinvesting ma huge portion of its profits. By the looks of it, there could be some other factors, not necessarily in control of the business, that's preventing growth. With that said, we studied the latest analyst forecasts and found that while the company has shrunk its earnings in the past, analysts expect its earnings to grow in the future. Are these analysts expectations based on the broad expectations for the industry, or on the company's fundamentals? Click here to be taken to our analyst's forecasts page for the company. Have feedback on this article? Concerned about the content?Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com. This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned. View Comments |
||
| 28.02.25 04:40:21 | There May Be Some Bright Spots In Knorr-Bremse's (ETR:KBX) Earnings | |
| Shareholders appeared unconcerned with Knorr-Bremse AG's (ETR:KBX) lackluster earnings report last week. We think that the softer headline numbers might be getting counterbalanced by some positive underlying factors. See our latest analysis for Knorr-Bremse XTRA:KBX Earnings and Revenue History February 28th 2025 Zooming In On Knorr-Bremse's Earnings Many investors haven't heard of the accrual ratio from cashflow, but it is actually a useful measure of how well a company's profit is backed up by free cash flow (FCF) during a given period. The accrual ratio subtracts the FCF from the profit for a given period, and divides the result by the average operating assets of the company over that time. This ratio tells us how much of a company's profit is not backed by free cashflow. That means a negative accrual ratio is a good thing, because it shows that the company is bringing in more free cash flow than its profit would suggest. While it's not a problem to have a positive accrual ratio, indicating a certain level of non-cash profits, a high accrual ratio is arguably a bad thing, because it indicates paper profits are not matched by cash flow. That's because some academic studies have suggested that high accruals ratios tend to lead to lower profit or less profit growth. Knorr-Bremse has an accrual ratio of -0.30 for the year to December 2024. That implies it has very good cash conversion, and that its earnings in the last year actually significantly understate its free cash flow. To wit, it produced free cash flow of €1.0b during the period, dwarfing its reported profit of €445.5m. Knorr-Bremse shareholders are no doubt pleased that free cash flow improved over the last twelve months. That might leave you wondering what analysts are forecasting in terms of future profitability. Luckily, you can click here to see an interactive graph depicting future profitability, based on their estimates. Our Take On Knorr-Bremse's Profit Performance Happily for shareholders, Knorr-Bremse produced plenty of free cash flow to back up its statutory profit numbers. Because of this, we think Knorr-Bremse's underlying earnings potential is as good as, or possibly even better, than the statutory profit makes it seem! On the other hand, its EPS actually shrunk in the last twelve months. The goal of this article has been to assess how well we can rely on the statutory earnings to reflect the company's potential, but there is plenty more to consider. So while earnings quality is important, it's equally important to consider the risks facing Knorr-Bremse at this point in time. You'd be interested to know, that we found 1 warning sign for Knorr-Bremse and you'll want to know about this. Story Continues This note has only looked at a single factor that sheds light on the nature of Knorr-Bremse's profit. But there are plenty of other ways to inform your opinion of a company. For example, many people consider a high return on equity as an indication of favorable business economics, while others like to 'follow the money' and search out stocks that insiders are buying. While it might take a little research on your behalf, you may find this free collection of companies boasting high return on equity, or this list of stocks with significant insider holdings to be useful. Have feedback on this article? Concerned about the content?Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com. This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned. View Comments |
||
| 23.02.25 07:24:00 | Knorr-Bremse Full Year 2024 Earnings: EPS Misses Expectations | |
| Knorr-Bremse (ETR:KBX) Full Year 2024 Results Key Financial Results Revenue: €8.00b (flat on FY 2023). Net income: €445.5m (down 19% from FY 2023). Profit margin: 5.6% (down from 6.9% in FY 2023). EPS: €2.77 (down from €3.43 in FY 2023).XTRA:KBX Revenue and Expenses Breakdown February 23rd 2025 All figures shown in the chart above are for the trailing 12 month (TTM) period Knorr-Bremse EPS Misses Expectations Revenue was in line with analyst estimates. Earnings per share (EPS) missed analyst estimates by 12%. The primary driver behind last 12 months revenue was the Rail Vehicle Systems segment contributing a total revenue of €4.04b (51% of total revenue). The largest operating expense was General & Administrative costs, amounting to €2.05b (54% of total expenses). Explore how KBX's revenue and expenses shape its earnings. Looking ahead, revenue is forecast to grow 3.9% p.a. on average during the next 3 years, compared to a 4.7% growth forecast for the Machinery industry in Germany. Performance of the German Machinery industry. The company's shares are up 3.5% from a week ago. Risk Analysis It is worth noting though that we have found 1 warning sign for Knorr-Bremse that you need to take into consideration. Have feedback on this article? Concerned about the content?Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com. This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned. View Comments |
||
| 03.02.25 10:20:12 | Are Investors Undervaluing Knorr-Bremse AG (ETR:KBX) By 30%? | |
| Key Insights The projected fair value for Knorr-Bremse is €110 based on 2 Stage Free Cash Flow to Equity Knorr-Bremse's €76.50 share price signals that it might be 30% undervalued Analyst price target for KBX is €78.07 which is 29% below our fair value estimate Today we'll do a simple run through of a valuation method used to estimate the attractiveness of Knorr-Bremse AG (ETR:KBX) as an investment opportunity by taking the expected future cash flows and discounting them to their present value. The Discounted Cash Flow (DCF) model is the tool we will apply to do this. It may sound complicated, but actually it is quite simple! We would caution that there are many ways of valuing a company and, like the DCF, each technique has advantages and disadvantages in certain scenarios. Anyone interested in learning a bit more about intrinsic value should have a read of the Simply Wall St analysis model. See our latest analysis for Knorr-Bremse The Calculation We're using the 2-stage growth model, which simply means we take in account two stages of company's growth. In the initial period the company may have a higher growth rate and the second stage is usually assumed to have a stable growth rate. To start off with, we need to estimate the next ten years of cash flows. Where possible we use analyst estimates, but when these aren't available we extrapolate the previous free cash flow (FCF) from the last estimate or reported value. We assume companies with shrinking free cash flow will slow their rate of shrinkage, and that companies with growing free cash flow will see their growth rate slow, over this period. We do this to reflect that growth tends to slow more in the early years than it does in later years. A DCF is all about the idea that a dollar in the future is less valuable than a dollar today, so we discount the value of these future cash flows to their estimated value in today's dollars: 10-year free cash flow (FCF) forecast 2025 2026 2027 2028 2029 2030 2031 2032 2033 2034 Levered FCF (€, Millions) €671.6m €725.9m €777.0m €813.3m €842.2m €865.5m €884.8m €901.2m €915.5m €928.3m Growth Rate Estimate Source Analyst x7 Analyst x7 Analyst x2 Est @ 4.67% Est @ 3.55% Est @ 2.78% Est @ 2.23% Est @ 1.85% Est @ 1.58% Est @ 1.40% Present Value (€, Millions) Discounted @ 5.6% €636 €651 €659 €653 €640 €623 €603 €581 €559 €537 ("Est" = FCF growth rate estimated by Simply Wall St) Present Value of 10-year Cash Flow (PVCF) = €6.1b After calculating the present value of future cash flows in the initial 10-year period, we need to calculate the Terminal Value, which accounts for all future cash flows beyond the first stage. The Gordon Growth formula is used to calculate Terminal Value at a future annual growth rate equal to the 5-year average of the 10-year government bond yield of 1.0%. We discount the terminal cash flows to today's value at a cost of equity of 5.6%. Story Continues Terminal Value (TV)= FCF2034 × (1 + g) ÷ (r – g) = €928m× (1 + 1.0%) ÷ (5.6%– 1.0%) = €20b Present Value of Terminal Value (PVTV)= TV / (1 + r)10= €20b÷ ( 1 + 5.6%)10= €12b The total value, or equity value, is then the sum of the present value of the future cash flows, which in this case is €18b. In the final step we divide the equity value by the number of shares outstanding. Compared to the current share price of €76.5, the company appears quite good value at a 30% discount to where the stock price trades currently. The assumptions in any calculation have a big impact on the valuation, so it is better to view this as a rough estimate, not precise down to the last cent.XTRA:KBX Discounted Cash Flow February 3rd 2025 The Assumptions Now the most important inputs to a discounted cash flow are the discount rate, and of course, the actual cash flows. Part of investing is coming up with your own evaluation of a company's future performance, so try the calculation yourself and check your own assumptions. The DCF also does not consider the possible cyclicality of an industry, or a company's future capital requirements, so it does not give a full picture of a company's potential performance. Given that we are looking at Knorr-Bremse as potential shareholders, the cost of equity is used as the discount rate, rather than the cost of capital (or weighted average cost of capital, WACC) which accounts for debt. In this calculation we've used 5.6%, which is based on a levered beta of 1.135. Beta is a measure of a stock's volatility, compared to the market as a whole. We get our beta from the industry average beta of globally comparable companies, with an imposed limit between 0.8 and 2.0, which is a reasonable range for a stable business. SWOT Analysis for Knorr-Bremse Strength Earnings growth over the past year exceeded the industry. Debt is not viewed as a risk. Dividends are covered by earnings and cash flows. Weakness Dividend is low compared to the top 25% of dividend payers in the Machinery market. Opportunity Annual earnings are forecast to grow for the next 3 years. Trading below our estimate of fair value by more than 20%. Threat Annual earnings are forecast to grow slower than the German market. Looking Ahead: Valuation is only one side of the coin in terms of building your investment thesis, and it shouldn't be the only metric you look at when researching a company. It's not possible to obtain a foolproof valuation with a DCF model. Preferably you'd apply different cases and assumptions and see how they would impact the company's valuation. For example, changes in the company's cost of equity or the risk free rate can significantly impact the valuation. Can we work out why the company is trading at a discount to intrinsic value? For Knorr-Bremse, we've compiled three fundamental factors you should further research: Risks: For example, we've discovered 1 warning sign for Knorr-Bremse that you should be aware of before investing here. Future Earnings: How does KBX's growth rate compare to its peers and the wider market? Dig deeper into the analyst consensus number for the upcoming years by interacting with our free analyst growth expectation chart. Other Solid Businesses: Low debt, high returns on equity and good past performance are fundamental to a strong business. Why not explore our interactive list of stocks with solid business fundamentals to see if there are other companies you may not have considered! PS. The Simply Wall St app conducts a discounted cash flow valuation for every stock on the XTRA every day. If you want to find the calculation for other stocks just search here. Have feedback on this article? Concerned about the content?Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com. This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned. View Comments |
||
| 15.10.24 10:50:16 | Here's What's Concerning About Knorr-Bremse's (ETR:KBX) Returns On Capital | |
| If you're not sure where to start when looking for the next multi-bagger, there are a few key trends you should keep an eye out for. Amongst other things, we'll want to see two things; firstly, a growing return on capital employed (ROCE) and secondly, an expansion in the company's amount of capital employed. If you see this, it typically means it's a company with a great business model and plenty of profitable reinvestment opportunities. So while Knorr-Bremse (ETR:KBX) has a high ROCE right now, lets see what we can decipher from how returns are changing. Return On Capital Employed (ROCE): What Is It? If you haven't worked with ROCE before, it measures the 'return' (pre-tax profit) a company generates from capital employed in its business. Analysts use this formula to calculate it for Knorr-Bremse: Return on Capital Employed = Earnings Before Interest and Tax (EBIT) ÷ (Total Assets - Current Liabilities) 0.20 = €973m ÷ (€8.2b - €3.2b) (Based on the trailing twelve months to June 2024). So, Knorr-Bremse has an ROCE of 20%. That's a fantastic return and not only that, it outpaces the average of 9.8% earned by companies in a similar industry. See our latest analysis for Knorr-Bremse roce In the above chart we have measured Knorr-Bremse's prior ROCE against its prior performance, but the future is arguably more important. If you're interested, you can view the analysts predictions in our freeanalyst report for Knorr-Bremse . The Trend Of ROCE On the surface, the trend of ROCE at Knorr-Bremse doesn't inspire confidence. Historically returns on capital were even higher at 25%, but they have dropped over the last five years. However it looks like Knorr-Bremse might be reinvesting for long term growth because while capital employed has increased, the company's sales haven't changed much in the last 12 months. It may take some time before the company starts to see any change in earnings from these investments. The Bottom Line On Knorr-Bremse's ROCE In summary, Knorr-Bremse is reinvesting funds back into the business for growth but unfortunately it looks like sales haven't increased much just yet. Unsurprisingly, the stock has only gained 2.8% over the last five years, which potentially indicates that investors are accounting for this going forward. As a result, if you're hunting for a multi-bagger, we think you'd have more luck elsewhere. Like most companies, Knorr-Bremse does come with some risks, and we've found 1 warning sign that you should be aware of. High returns are a key ingredient to strong performance, so check out our free list ofstocks earning high returns on equity with solid balance sheets. Have feedback on this article? Concerned about the content?Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com. This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned. View comments |
||
| 01.10.24 10:30:54 | What Is Knorr-Bremse AG's (ETR:KBX) Share Price Doing? | |
| Today we're going to take a look at the well-established Knorr-Bremse AG (ETR:KBX). The company's stock saw a double-digit share price rise of over 10% in the past couple of months on the XTRA. The company's trading levels have approached the yearly peak, following the recent bounce in the share price. As a large-cap stock with high coverage by analysts, you could assume any recent changes in the company’s outlook is already priced into the stock. But what if there is still an opportunity to buy? Let’s take a look at Knorr-Bremse’s outlook and value based on the most recent financial data to see if the opportunity still exists. See our latest analysis for Knorr-Bremse Is Knorr-Bremse Still Cheap? Knorr-Bremse is currently expensive based on our price multiple model, where we look at the company's price-to-earnings ratio in comparison to the industry average. In this instance, we’ve used the price-to-earnings (PE) ratio given that there is not enough information to reliably forecast the stock’s cash flows. We find that Knorr-Bremse’s ratio of 21.46x is above its peer average of 16.57x, which suggests the stock is trading at a higher price compared to the Machinery industry. Furthermore, Knorr-Bremse’s share price also seems relatively stable compared to the rest of the market, as indicated by its low beta. If you believe the share price should eventually reach levels around its industry peers, a low beta could suggest it is unlikely to rapidly do so anytime soon, and once it’s there, it may be hard to fall back down into an attractive buying range. Can we expect growth from Knorr-Bremse? earnings-and-revenue-growth Future outlook is an important aspect when you’re looking at buying a stock, especially if you are an investor looking for growth in your portfolio. Although value investors would argue that it’s the intrinsic value relative to the price that matter the most, a more compelling investment thesis would be high growth potential at a cheap price. Knorr-Bremse's earnings over the next few years are expected to increase by 36%, indicating a highly optimistic future ahead. This should lead to more robust cash flows, feeding into a higher share value. What This Means For You Are you a shareholder? KBX’s optimistic future growth appears to have been factored into the current share price, with shares trading above industry price multiples. At this current price, shareholders may be asking a different question – should I sell? If you believe KBX should trade below its current price, selling high and buying it back up again when its price falls towards the industry PE ratio can be profitable. But before you make this decision, take a look at whether its fundamentals have changed. Are you a potential investor? If you’ve been keeping tabs on KBX for some time, now may not be the best time to enter into the stock. The price has surpassed its industry peers, which means it is likely that there is no more upside from mispricing. However, the optimistic prospect is encouraging for KBX, which means it’s worth diving deeper into other factors in order to take advantage of the next price drop. If you want to dive deeper into Knorr-Bremse, you'd also look into what risks it is currently facing. At Simply Wall St, we found 1 warning sign for Knorr-Bremse and we think they deserve your attention. If you are no longer interested in Knorr-Bremse, you can use our free platform to see our list of over 50 other stocks with a high growth potential. Have feedback on this article? Concerned about the content?Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com. This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned. View comments |
||
