REPORT 17 February 2017 price 8,81

Transcription

1 Basic Data Sector : Industrial Machinery & Equipment Market cap (Mln. ) : Enterprise value (Mln. ) : Revenues 2015 (Mln. $) : Ebit 2015 (Mln. $) : Net Profit 2015 (Mln. $) : 236 Market : Italy Finlabo Rating Finlabo Map Business description NV, a new Group created from the merger of Fiat Industrial SpA and CNH Global NV, is a global leader in the capital goods sector that, through its various businesses, designs, produces and sells agricultural and construction equipment, trucks, commercial wehicles, buses and specialty vehicles, in addition to a broad portfolio of powertrain applications. Across its 12 brands, 64 manufacturing plants, 49 research and development centers and a workforce of more than 69,000 people, is present in 190 countries giving it a unique competitive position. The Group has the flexibility to pursue the most advantageous strategic options and capitalize on opportunities for growth and consolidation consistent with our ambitions for it to become a leader in the sector. Overall evaluation, on the basis of the Finlabo Evaluation Model, gets a Rating of 4/5 which implies a 6 month expected positive total return between 5% and 10%.The Rating assigned reflects a very positive Technical View, though the Fundamental View is basically neutral. The Risk Grade of the security is lower than the market average. 1

2 Stock trend and Finlabo Rating in the last 3 years 2

3 Fundamental evaluation In the last 3 years 's revenues increased at an average growth rate of 2% and its net operating margin declined from 8% to 6%. Net profit for the fiscal year ending at adjusted for extraordinary items decreased to 363 milion Euro and the earning per share was 0,267 Euro. The company's profitability worsened, though remaining at satisfactory levels, with a Return on Common Equity of 5% alligned with the Cost of Capital, estimated at 7%. The company financial structure is fragile, with a debt/equity ratio equal to 2,9 and a ratio between debt and EBITDA equal to 6,6. For the years , consensus estimates foresee that revenues will decrease 5%and that EPS will register a 26% average annual growth; the Return on Equity is foreseen to rise to 11%. At current prices, the stock is worth 33 times 2015 net profit adjusted and 26,7 times consensus net earnings for 2016 and has a multiple of 2,5 on the book value estimated for In summary the company has decent fundamentals and has an improving earnings outlook; the stock price reflects the improving outlook, offering a limited upside. Profitability Financial strength Growth Evaluation Technical Evaluation The stock's long term price trend is positive with prices remaining firmly above long term moving average. Also the short term price trend is positive and the main oscillators don't show signs of overbought extremes. The stock has a risk index lower than the market average, with a one month value at risk equal to 20% and a beta index equal to 0,7. Safety Rating Timing Trend 3

4 FINLABO bases its rating system on 5 levels: 5: The total return of the stock is expected to be more than 10% over a 6 months period. 4: The total return of the stock is expected to be more than 5% over a 6 months period. over a 6 months period. in a 6 months period. 3: The total return of the stock is expected positive 2: The total return of the stock is expected negative 1: The total return of the stock is expected to be less than 5% over a 6 months period. FINLABO also places each security on a 9 quadrants matrix (FINLABO Map) based on the mix of Fundamental and Technical Rating: The Companies characterized by a FINLABO Rating 5 are generally positioned at the top right of the matrix, while the securities with a Finlabo Rating 1 are situated at the bottom left. Companies with an intermediate Finlabo Rating (2,3,4), can be positioned in different quadrants although with the same Rating. When two stocks have the same rating, the situation will be very different depending on the position in the matrix: for example, a security with FINLABO Rating 3 positioned in the top left of the matrix and has an excellent technical rating but a negative Fundament Rating; it could be in the last part of a positive trend or it could be attractive for speculators and justify a price premium. conversely, a security positioned at the bottom right and characterized by a negative Technical Rating and an excellent Fundamental rating could be in the final stage of a downtrend or discount negative scenarios not yet reflected in the fundamentals.

5 FinLABO SIM S.p.A. is a registered investment company (Albo delle Società di Intermediazione Mobiliare n. 245), regulated by Banca D Italia and authorized by Consob (Resolution n on March 3rd, 2008, Extension n del 5/10/2010) to manage assets (not holding), to provide consulting services in the field of investments - Article 1, paragraph 5, letter f of Legislative Decree 58/98 - and Financial Research and other forms of general recommendation relating to transactions in financial instruments. The content of the Site is provided for information purposes only and does not constitute a solicitation or offer, or advice or recommendation, to buy or sell any investment product, to effect any transactions, or to conclude any transaction of any kind whatsoever. This document is prepared by FINLABO Research, in the person of Dr. Mauro Stampatori, on the basis of information provided by third parties, that FINLABO considers reliable, but of which we can not guarantee the completeness and accuracy. In particular, balance sheet data are provided by "Reuters Research" and public corporate documents, the consensus estimates are taken from "Reuters Estimates", the historical quotations is provided by "Reuters Datalink." Forecasts and opinions expressed are the result of sophisticated mathematical models ("FINLABO Rating System ") developed by FINLABO and methodologies based on fundamental and technical analysis. Although the effectiveness of these models has been assessed through statistical analysis and historical simulations, Finlabo cannot guarantee correspondence between the rating and future performances. The information, updated weekly, are at any time subject to change without notice. FINLABO is an independent company incorporated under the Italian Law that has no particular interest to promote or recommend certain financial products; which does not mean that its members, directors, partners and employees may hold directly or indirectly the securities analysed, in accordance with rules and regulations. The use of information as a support for investment decision is made at the User's own risk; so, if the User chooses to make an investment on the basis of information provided by FINLABO, he should (i) carry out further analysis and (ii) verify that the choice is appropriate to his financial situation and his own personal financial risk tolerance FINLABO, in any case, will not be liable for any damages arising, directly or indirectly, by investment made on the basis of information obtained through this document. The material contained in this document is exclusive property of FINLABO and is protected by the laws on industrial property or intellectual; It is strictly forbidden for the user to copy or modify the Website and its content and to create derivative works or to dispose of it in any other way.