Quaker Chemical Corporation is a leading global provider of process fluids, chemical specialties, and technical expertise to a wide range of industries, including steel, aluminum, automotive, mining, aerospace, tube and pipe, cans, and others. The company was founded in 1918 and is based in Conshohocken, Pennsylvania.
KWR Price Forecast Based on DCF Valuation
DCF Fair Value Target:
Below please find a table outlining a discounted cash flow forecast for KWR, in which we model out valuation assuming a variety of terminal growth rates. To summarize, we found that Quaker Chemical Corp ranked in the 34th percentile in terms of potential gain offered. Our DCF analysis suggests the stock is overvalued by about 54.33%. As for the metrics that stood out in our discounted cash flow analysis of Quaker Chemical Corp, consider:
Quaker Chemical Corp's weighted average cost of capital (WACC) is 10%; for context, that number is higher than 66.55% of tickers in our DCF set.
Quaker Chemical Corp's effective tax rate, as measured by taxes paid relative to net income, is at 0 -- greater than merely 0% of US stocks with positive free cash flow.
The company's cost of debt, derived from its interest coverage, tax rate, and market capitalization, is greater than 68.09% of stocks in its sector (Basic Materials).
Terminal Growth Rate in Free Cash Flow
Return Relative to Current Share Price
IOSP, IFF, MTX, ROCK, and SUZ can be thought of as valuation peers to KWR, in the sense that they are in the Basic Materials sector and have a similar price forecast based on DCF valuation.
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Introduction It’s been about 13 months since I last discussed Quaker Chemical (KWR) here on Seeking Alpha, as I wanted to figure out how the business combination with Houghton would have an impact on the profitability and free cash flow performance of the combined entity. As you may remember, Houghton...
The Investment Doctor on Seeking Alpha | December 28, 2020