LKQ Corporation is a leading provider of alternative and specialty parts to repair and accessorize automobiles and other vehicles. The company was founded in 1998 and is based in Chicago, Illinois.
LKQ Price Forecast Based on DCF Valuation
DCF Fair Value Target:
Below please find a table outlining a discounted cash flow forecast for LKQ, in which we model out valuation assuming a variety of terminal growth rates. To summarize, we found that Lkq Corp ranked in the 76th percentile in terms of potential gain offered. Moreover, under all the scenarios we modelled, the output consistently forecasted positive returns. The most interesting components of our discounted cash flow analysis for Lkq Corp ended up being:
The company has produced more trailing twelve month cash flow than 89.41% of its sector Consumer Cyclical.
Lkq Corp's weighted average cost of capital (WACC) is 7%; for context, that number is higher than merely 7.8% of tickers in our DCF set.
LKQ'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 merely 7.8% of tickers in our DCF set.
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 LKQ, try MLR, HOFT, MPAA, HTHT, and SALM.
LKQ Corporation (LKQ) second-quarter results came in better than expected. The company’s cost alignment strategy, which began even before COVID-19, is paying dividends, as profit margins remain strong even in light of a 19% decline in sales for the quarter. The company also generated an impressive amount of FCF during...
At this time, I would like to welcome everyone to the LKQ Corporation's Second Quarter 2020 Earnings Conference Call. With us today are Nick Zarcone, LKQ's President and Chief Executive Officer; and Varun Laroyia, Executive Vice President and Chief Financial Officer.