Meritor Inc. is a leading global supplier of drivetrain, mobility, braking and aftermarket solutions for commercial vehicle and industrial markets. The company was founded in 1921 and is based in Troy, Michigan.
MTOR 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 Meritor Inc. To summarize, we found that Meritor Inc ranked in the 49th 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 Meritor Inc, consider:
Interest coverage, a measure of earnings relative to interest payments, is 5.89 -- which is good for besting 70.36% of its peer stocks (US stocks in the Consumer Cyclical sector with positive cash flow).
The business' balance sheet reveals debt to be 37% of the company's capital (with equity being the remaining amount). Approximately 67.75% of US stocks with free cash flow have a lower reliance on debt in their capital structure.
Meritor Inc's weighted average cost of capital (WACC) is 8%; for context, that number is higher than merely 5.16% 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 MTOR, try UONE, ALV, DLX, CAL, and SCI.
Here at Zacks, our focus is on the proven Zacks Rank system, which emphasizes earnings estimates and estimate revisions to find great stocks. Nevertheless, we are always paying attention to the latest value, growth, and momentum trends to underscore strong picks.
TROY, Mich., Jan. 7, 2021 /PRNewswire/ -- Meritor, Inc. (NYSE: MTOR) today introduced two new medium-duty drivelines to its Permalube™ RPL driveline family. The RPL10 and RPL14 are Meritor's first medium-duty (Class 6-7) entries in its Permalube RPL driveline lineup and are permanently…
Understanding Value Stocks A value stock is traditionally defined in terms of how investors in the marketplace are valuing that company's future growth prospects. Low P/E multiples are good base indicators that the company is undervalued and can most likely be labelled as a value stock.The following stocks are considered to be notable value stocks in the consumer cyclical sector: 1. Qurate Retail (NASDAQ:QRTEA) - P/E: 6.59 2. Meritage Homes (NYSE:MTH) - P/E: 8.46 3. Century Communities (NYSE:CCS) - P/E: 8.48 4. Meritor (NYSE:MTOR) - P/E: 8.49 5. Big 5 Sporting Goods (NASDAQ:BGFV) - P/E: 6.16This quarter, Qurate Retail experienced an increase in earnings per share, which was 0.54 in Q2 and is now 0.57. Qurate Retail does not have a dividend yield, which investors should be aware of...