Brady (BRC:NYS) Fundamental Valuation Report

Fundamental Valuation Report

Brady(BRC:NYS)

Industrials:Security & Protection Services

This Report was generated using the valuation tools available on StockCalc.com. For a free 30 day trial click here.

Close Price/Date
$40.81 (USD) 30/10/2018

Weighted Valuation
$43.58 (USD)

Overall Rating
Undervalued by 6.8%

Valuation Models Analyst Consensus: $48.00 (USD)
(in order of importance) Adjusted Book Value: $36.52 (USD)
Multiples: $44.44 (USD)
Valuation Methods This company is:
Cash Flow: Overvalued on a Cash Flow Valuation
Comparable Company: Undervalued on a Comparable Valuation
Asset: Overvalued on an Asset Valuation

Company Overview (BRC:NYS USD)

Price 40.81
Range 39.60 – 40.99
52 week 35.90 – 46.45
Open 39.61
Vol / Avg. 162085/241312
Mkt cap 2.12B
P/E 23.59
Div/yield 0.83/0.02
EPS 1.73
Shares 52M
Beta 1.15

Company Description

Brady Corp provides identification solutions and workplace safety products. The company offers identification and healthcare products that are sold under the Brady brand to maintenance, repair, and operations as well as original-equipment manufacturing customers. Products include safety signs and labeling systems, material identification systems, wire identification, patient identification, and people identification. Brady also provides workplace safety and compliance products such as safety and compliance signs, asset tracking labels, and first-aid products. The largest end market is the United States.

Valuation Details

 We have up to 6 valuation points for each company. Details are at the bottom of the report.

Discounted Cash Flow and Sensitivity Analysis for BRC:NYS

Using a discounted cash flow model we generated an intrinsic value of $31.13 (USD) for BRC:NYS

Sensitivity Analysis

(showing how changes in the input variables impact the DCF calculation)

BRC:NYS Current Values Valuation If Dropped * Valuation If Raised *
Calculated Value: $31.13 1% 5% 1% 5%
WACC (or Ke) 9.68 $37.42 $26.47
Terminal Growth Rate 3.00 $27.01 $36.69
Tax Rate 0.27 $33.71 $28.55
Cash Flow 213,509,901 $29.07 $33.18
Capital Expenditures -24,831,000 $30.90 $31.35
Long Term Debt 216,910,000 $31.34 $30.92

* Changes are absolute: ex WACC from 8% to 7%

Comparables Model

Using similar companies and price based ratios we generated a valuation of $54.11 (USD) for BRC:NYS. We also generated a valuation of $56.63 (USD) using other metrics and comparables.
The comparable companies were Brink’s (BCO:NYS) and MSA Safety (MSA:NYS).

Company BRC:NYS End Date Value
Earnings/Share $1.73 (USD)
Book Value/Share $14.46 (USD)
Sales/Share $22.35 (USD)
Cash Flow/Share $2.72 (USD)
EBITDA/Share $3.44 (USD)
Price Based on Comps Adjustment Factor (%)
$110.93 (USD) -28.2
$161.42 (USD) -70.6
$46.81 (USD) -9.6
$57.31 (USD) -63.8
$81.04 (USD) 0.0
BRC:NYS Ratios Used Average Values BCO:NYS MSA:NYS
25.29 PE Ratio 64.12 0.00 64.12
3.03 PB Ratio 11.16 15.83 6.50
1.96 PS Ratio 2.09 1.03 3.16
16.06 PCF Ratio 21.41 15.20 27.62
11.88 EV to EBITDA 23.56 16.72 30.41

Multiples

Using a multiples approach we generated a valuation of  $44.44 (USD) for BRC:NYS

Company BRC:NYS End Date Value
Earnings/Share $1.73 (USD)
Book Value/Share $14.46 (USD)
Sales/Share $22.35 (USD)
Cash Flow/Share $2.72 (USD)
EBITDA/Share $3.44 (USD)
Price Based on Comps Adjustment Factor
$70.66 (USD) 0
$37.29 (USD) 0
$32.60 (USD) 0
$37.23 (USD) 0
$0.00 (USD) 0
Ratios Ratio Average
PE Ratio 40.85
PB Ratio 2.58
PS Ratio 1.46
PCF Ratio 13.67
EV to EBITDA 0.00

Adjusted Book Value versus Historical Price to Book

The average the Price to Book ratio for  BRC:NYS for the last 10 years was  2.52

We ran the Adjusted Book Value for  BRC:NYS and generated a book value of  $14.48 (USD)
By multiplying these we get an adjusted valuation of  $36.52 (USD)

Analyst Data

In the Stockcalc database there are 1 analysts that provide a valuation for BRC:NYS. The 1 analysts have a concensus valuation for BRC:NYS for 2019 of $48.00 (USD).

BRC:NYS Brady

No analyst recommendation
Current Price: not available

No analyst consensus

Explanation of Valuation Models

We have up to 6 valuation points for each company in the database.

The Discounted Cash Flow (DCF) valuation is a cash flow model where cash flow projections are discounted back to the present to calculate value per share. DCF is a common valuation technique especially for companies undergoing irregular cash flows such as resource companies (mining, forestry, oil and gas) going though price cycles or smaller companies about to generate cash flow (junior exploration companies, junior pharma, technology firms…).

The Price Comparables valuation is the result of valuing the company we are looking at on the basis of ratios from selected comparable companies: Price to Earnings, Price to Book, Price to Sales, Price to Cash Flow, Enterprise Value (EV) to EBITDA. Each of these ratios for the selected comparable companies are averaged and multiplied by the values for the company we are interested in to calculate a value per share for our selected company.

We have included the Other Comparables as a way to value companies that cannot be valued using Earnings based ratios. This technique is very useful for companies still experiencing negative cash flows such as mining exploration firms. We use Cash/Share, Book Value/Share, MarketCap, 1 Year Return, NetPPE as the ratios here. Each of these ratios for the selected comparable companies are averaged and multiplied by the values for the company we are interested in to calculate a value per share for our selected company.

Multiples are similar to Price comparables where we look at current or historic ratios for the company in question to assess what it should be worth today based on those historic ratios. We use the same 5 ratios as in the price comparables and value the company with its historic averages.

With Adjusted Book Value (ABV) we calculate the book value per share for the company based on its balance sheet and multiply that book value per share by its historical price to book ratio to calculate a value per share.

If we have Analyst coverage for the company we use the consensus target price here.

Notice to User


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