Briggs & Stratton (BGG:NYS) Fundamental Valuation Report

Fundamental Valuation Report

Briggs & Stratton(BGG:NYS)

Industrials:Diversified Industrials

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

Close Price/Date
$15.04 (USD) 01/11/2018

Weighted Valuation
$23.77 (USD)

Overall Rating
Undervalued by 58.0%

Valuation Models Analyst Consensus: $25.00 (USD)
(in order of importance) Comparables: $23.16 (USD)
Adjusted Book Value: $21.30 (USD)
Valuation Methods This company is:
Cash Flow: Overvalued on a Cash Flow Valuation
Comparable Company: Undervalued on a Comparable Valuation
Asset: Undervalued on an Asset Valuation

Company Overview (BGG:NYS USD)

Price 15.04
Range 14.45 – 15.10
52 week 13.41 – 27.19
Open 14.79
Vol / Avg. 769055/429738
Mkt cap 637.51M
P/E 44.17
Div/yield 0.56/0.04
EPS -0.28
Shares 42.39M
Beta 0.65

Company Description

Briggs & Stratton Corp is a producer of gasoline engines and outdoor power equipment. It operates in two segments including Engines segment and Products segment. Briggs & Stratton manufactures four-cycle aluminum alloy gasoline engines with gross horsepower ranging from 5.5hp up to 37hp and torques that range from 4.50 ft-lbs gross torque to 21.00 ft-lbs gross torque. The company’s engines are used primarily by the lawn and garden equipment industry.

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 BGG:NYS

Using a discounted cash flow model we generated an intrinsic value of $8.92 (USD) for BGG:NYS

Sensitivity Analysis

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

BGG:NYS Current Values Valuation If Dropped * Valuation If Raised *
Calculated Value: $8.92 1% 5% 1% 5%
WACC (or Ke) 9.99 $11.59 $6.92
Terminal Growth Rate 3.00 $7.16 $11.26
Tax Rate 0.27 $10.16 $7.68
Cash Flow 106,113,722 $7.72 $10.12
Capital Expenditures -38,154,400 $8.52 $9.32
Long Term Debt 271,631,000 $9.24 $8.60

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

Comparables Model

Using similar companies and price based ratios we generated a valuation of $19.45 (USD) for BGG:NYS. We also generated a valuation of $23.16 (USD) using other metrics and comparables.
The comparable companies were AZZ (AZZ:NYS), Circor International (CIR:NYS), Kadant (KAI:NYS) and SPX (SPXC:NYS).

Company BGG:NYS End Date Value
Earnings/Share ($0.28) (USD)
Book Value/Share $13.46 (USD)
Sales/Share $44.72 (USD)
Cash Flow/Share $2.20 (USD)
EBITDA/Share $2.25 (USD)
Price Based on Comps Adjustment Factor (%)
$0.00 (USD) 33.4
$33.10 (USD) -61.1
$52.18 (USD) -69.3
$28.17 (USD) -59.9
$33.47 (USD) 27.8
BGG:NYS Ratios Used Average Values AZZ:NYS CIR:NYS KAI:NYS SPXC:NYS
0.00 PE Ratio 21.53 23.10 0.00 30.18 11.32
1.08 PB Ratio 2.46 1.97 1.12 3.22 3.52
0.32 PS Ratio 1.17 1.29 0.64 1.85 0.89
6.59 PCF Ratio 15.45 12.34 0.00 14.89 19.13
8.65 EV to EBITDA 14.87 14.33 16.71 12.61 15.84

Multiples

Using a multiples approach we generated a valuation of  $20.06 (USD) for BGG:NYS

Company BGG:NYS End Date Value
Earnings/Share ($0.28) (USD)
Book Value/Share $13.46 (USD)
Sales/Share $44.72 (USD)
Cash Flow/Share $2.20 (USD)
EBITDA/Share $2.25 (USD)
Price Based on Comps Adjustment Factor
$0.00 (USD) 0
$21.68 (USD) 0
$21.82 (USD) 0
$16.74 (USD) 0
$20.01 (USD) 0
Ratios Ratio Average
PE Ratio 25.78
PB Ratio 1.61
PS Ratio 0.49
PCF Ratio 7.59
EV to EBITDA 8.89

Adjusted Book Value versus Historical Price to Book

The average the Price to Book ratio for  BGG:NYS for the last 10 years was  1.59

We ran the Adjusted Book Value for  BGG:NYS and generated a book value of  $13.38 (USD)
By multiplying these we get an adjusted valuation of  $21.30 (USD)

Analyst Data

In the Stockcalc database there are 1 analysts that provide a valuation for BGG:NYS. The 1 analysts have a concensus valuation for BGG:NYS for 2019 of $25.00 (USD).

BGG:NYS Briggs & Stratton

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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