Armstrong World Industries designs, manufactures, and sells flooring products and ceiling systems worldwide. The company was founded in 1891 and is based in Lancaster, Pennsylvania.
AWI Price Forecast Based on DCF Valuation
DCF Fair Value Target:
We started the process of determining a valid price forecast for Armstrong World Industries Inc with a discounted cash flow analysis -- the results of which can be found in the table below. To summarize, we found that Armstrong World Industries Inc ranked in the 25th percentile in terms of potential gain offered. We should note, though, that all scenearios modelled for this stock suggest it is overvalued. In terms of the factors that were most noteworthy in this DCF analysis for AWI, they are:
Armstrong World Industries Inc's effective tax rate, as measured by taxes paid relative to net income, is at 40 -- greater than 93.17% of US stocks with positive free cash flow.
Armstrong World Industries Inc's interest coverage rate -- a measure of gross earnings relative to interest payments -- comes in at -1.44. This coverage rate is greater than that of only 15.88% of stocks we're observing for the purpose of forecasting via discounted cash flows.
The company's cost of debt, derived from its interest coverage, tax rate, and market capitalization, is greater than 76.07% of stocks in its sector (Basic Materials).
Terminal Growth Rate in Free Cash Flow
Return Relative to Current Share Price
Want more companies with a valuation profile/forecast similar to that of Armstrong World Industries Inc? See CCCL, ECL, MAS, URG, and USLM.
Armstrong World Industries (AWI) delivered earnings and revenue surprises of -3.51% and -2.73%, respectively, for the quarter ended March 2020. Do the numbers hold clues to what lies ahead for the stock?