Kearny Financial (KRNY:NAS) Fundamental Valuation Report

Fundamental Valuation Report

Kearny Financial(KRNY:NAS)

Financial Services:Savings & Cooperative Banks

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

Close Price/Date
$12.89 (USD) 02/11/2018

Weighted Valuation
$15.05 (USD)

Overall Rating
Undervalued by 16.8%

Valuation Models Analyst Consensus: $17.00 (USD)
(in order of importance) Adjusted Book Value: $14.80 (USD)
Comparables: $9.72 (USD)
Valuation Methods This company is:
Cash Flow: Overvalued on a Cash Flow Valuation
Comparable Company: Overvalued on a Comparable Valuation
Asset: Undervalued on an Asset Valuation

Company Overview (KRNY:NAS USD)

Price 12.89
Range 12.62 – 12.92
52 week 12.58 – 15.10
Open 12.62
Vol / Avg. 338872/370787
Mkt cap 1.26B
P/E 53.71
Div/yield 0.25/0.01
EPS 0.24
Shares 97.75M
Beta 0.61

Company Description

Kearny Financial Corp is a Maryland holding company for Kearny Bank, a federally-chartered stock savings bank. The bank is engaged in the business of attracting deposits from the general public in New Jersey and New York, and using these deposits, together with other funds, to originate or purchase loans for its portfolios and invest in securities. The bank’s loan portfolio is chiefly comprised of loans collateralized by commercial and residential real estate. It is also heavily into secured and unsecured business and consumer loans. The bank’s primary source of income is net interest income.

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 KRNY:NAS

Using a discounted cash flow model we generated an intrinsic value of $5.15 (USD) for KRNY:NAS

Sensitivity Analysis

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

KRNY:NAS Current Values Valuation If Dropped * Valuation If Raised *
Calculated Value: $5.15 1% 5% 1% 5%
WACC (or Ke) 7.95 $6.43 $4.29
Terminal Growth Rate 2.90 $4.36 $6.31
Tax Rate 0.25 $5.51 $4.79
Cash Flow 41,710,402 $4.86 $5.43
Capital Expenditures -4,008,800 $5.12 $5.17
Long Term Debt 0 $5.15 $5.15

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

Comparables Model

Using similar companies and price based ratios we generated a valuation of $9.72 (USD) for KRNY:NAS. We also generated a valuation of $15.48 (USD) using other metrics and comparables.
The comparable companies were Capitol Federal Financial (CFFN:NAS), Flagstar Bancorp (FBC:NYS), New York Community Banc (NYCB:NYS), Provident Financial (PFS:NYS) and Washington Federal (WAFD:NAS).

Company KRNY:NAS End Date Value
Earnings/Share $0.24 (USD)
Book Value/Share $12.98 (USD)
Sales/Share $1.63 (USD)
Cash Flow/Share $0.55 (USD)
EBITDA/Share $1.02 (USD)
Price Based on Comps Adjustment Factor (%)
$3.81 (USD) 0.0
$14.73 (USD) 32.4
$7.41 (USD) 0.0
($8.91) (USD) 45.7
$0.00 (USD) 0.0
KRNY:NAS Ratios Used Average Values CFFN:NAS FBC:NYS NYCB:NYS PFS:NYS WAFD:NAS
53.92 PE Ratio 15.86 16.77 22.31 11.01 16.94 12.24
1.00 PB Ratio 1.13 1.31 1.20 0.75 1.24 1.17
7.95 PS Ratio 4.55 7.57 2.16 3.70 4.58 4.73
23.71 PCF Ratio 10.26 14.09 0.00 4.11 10.53 12.29
0.00 EV to EBITDA 0.00 0.00 0.00 0.00 0.00 0.00

Multiples

Using a multiples approach we generated a valuation of  $30.84 (USD) for KRNY:NAS

Company KRNY:NAS End Date Value
Earnings/Share $0.24 (USD)
Book Value/Share $12.98 (USD)
Sales/Share $1.63 (USD)
Cash Flow/Share $0.55 (USD)
EBITDA/Share $1.02 (USD)
Price Based on Comps Adjustment Factor
$18.02 (USD) 0
$14.81 (USD) 0
$18.48 (USD) 0
$17.48 (USD) 0
$85.43 (USD) 0
Ratios Ratio Average
PE Ratio 75.06
PB Ratio 1.14
PS Ratio 11.35
PCF Ratio 32.03
EV to EBITDA 83.92

Adjusted Book Value versus Historical Price to Book

The average the Price to Book ratio for  KRNY:NAS for the last 10 years was  1.16

We ran the Adjusted Book Value for  KRNY:NAS and generated a book value of  $12.74 (USD)
By multiplying these we get an adjusted valuation of  $14.80 (USD)

Analyst Data

In the Stockcalc database there are 1 analysts that provide a valuation for KRNY:NAS. The 1 analysts have a concensus valuation for KRNY:NAS for 2019 of $17.00 (USD).

KRNY:NAS Kearny Financial

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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