Kronos Worldwide, Inc. produces and markets titanium dioxide pigments (TiO2) worldwide. It produces TiO2 in two crystalline forms, rutile and anatase to impart whiteness, brightness, opacity, and durability for products, paints, coatings, plastics, paper, fibers, and ceramics, as well as for various specialty products, such as inks, food, and cosmetics. The company is based in Dallas.
KRO Price Forecast Based on DCF Valuation
DCF Fair Value Target:
We started the process of determining a valid price forecast for Kronos Worldwide Inc with a discounted cash flow analysis -- the results of which can be found in the table below. To summarize, we found that Kronos Worldwide Inc ranked in the 18th percentile in terms of potential gain offered. We should note, though, that all scenearios modelled for this stock suggest it is overvalued. As for the metrics that stood out in our discounted cash flow analysis of Kronos Worldwide Inc, consider:
Interest coverage, a measure of earnings relative to interest payments, is 5.38 -- which is good for besting 60.98% of its peer stocks (US stocks in the Basic Materials sector with positive cash flow).
Kronos Worldwide Inc's weighted average cost of capital (WACC) is 8%; for context, that number is higher than just 16.9% of tickers in our DCF set.
Terminal Growth Rate in Free Cash Flow
Return Relative to Current Share Price
For other companies in the Basic Materials that have a similar discounted cashflow valuation profile (and ensuing price forecasts) as KRO, try GOLD, GRA, JHX, AVNT, and ECL.
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After a sharp correction that also impacted other titania market heavyweights, the stock of Kronos Worldwide, Inc. (KRO), a global producer of value-added titanium dioxide pigments, is yielding more than 7.5%, which value investors may find appealing. Data by YCharts Nevertheless, there are a few nuances that my esteemed readers...