The Cato Corporation operates as a specialty retailer of fashion apparel and accessories in the Southeastern United States. The company was founded in 1946 and is based in Charlotte, North Carolina.
CATO Price Forecast Based on DCF Valuation
DCF Fair Value Target:
The table below illustrates the output of a discounted cash flow forecast using a variety of scenarios for Cato Corp. To summarize, we found that Cato Corp ranked in the 47th percentile in terms of potential gain offered. Moreover, under all the scenarios we modelled, the output consistently forecasted positive returns. As for the metrics that stood out in our discounted cash flow analysis of Cato Corp, consider:
The company's compound free cash flow growth rate over the past 5.58 years comes in at -0.07%; that's greater than only 20.1% of US stocks we're applying DCF forecasting to.
CATO's estimated cost of debt, based largely on its market capitalization and its interest coverage ratio, is 2%; for context, that number is higher than 32% of tickers in our DCF set.
Relative to other stocks in its sector (Consumer Cyclical), Cato Corp has a reliance on debt greater than just 16.06% of them.
Terminal Growth Rate in Free Cash Flow
Return Relative to Current Share Price
For other companies in the Consumer Cyclical that have a similar discounted cashflow valuation profile (and ensuing price forecasts) as CATO, try DAN, NTN, CCK, DECK, and VIAC.