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:
Below please find a table outlining a discounted cash flow forecast for MTOR, in which we model out valuation assuming a variety of terminal growth rates. To summarize, we found that Meritor Inc ranked in the 94th percentile in terms of potential gain offered. Specifically, our DCF analysis implies the stock is trading below its fair value by an estimated 4307.5%. The most interesting components of our discounted cash flow analysis for Meritor Inc ended up being:
In the past 5.75 years, Meritor Inc has a compound free cash flow growth rate of 0.72%; that's higher than 93.52% of free cash flow generating stocks in the Consumer Cyclical sector.
Meritor Inc's weighted average cost of capital (WACC) is 6%; for context, that number is higher than merely 4.44% of tickers in our DCF set.
MTOR'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 4.44% of tickers in our DCF set.
Terminal Growth Rate in Free Cash Flow
Return Relative to Current Share Price
GIII, RLH, SUP, FCAU, and MDCA can be thought of as valuation peers to MTOR, in the sense that they are in the Consumer Cyclical sector and have a similar price forecast based on DCF valuation.
Meritor (MTOR) has priced $300M of its 6.25% unsecured senior notes due 2025. Closing date is June 8, 2020. Net proceeds, together with cash on hand, will be used to repurchase ~$295M of the outstanding $304M balance under the senior secured credit facility.Previously: Meritor announces $300M debt offering (June 3)...
TROY, Mich., June 4, 2020 /PRNewswire/ -- Meritor, Inc. (NYSE: MTOR) today announced the pricing on June 3, 2020 of $300 million aggregate principal amount of its 6.25% unsecured senior notes due 2025 (the "notes"). The offering is being made in a private placement to qualified…
Meritor (MTOR) to offer $300M of unsecured senior notes, due 2025 in a private placement. Proceeds will be used to repay a portion of the outstanding balance under its senior secured credit facility....
TROY, Mich., June 3, 2020 /PRNewswire/ -- Meritor, Inc. (NYSE: MTOR) today announced it intends, subject to market and other conditions, to offer $300 million aggregate principal amount of unsecured senior notes, due 2025 (the "notes"), in a private placement to qualified institutional…
TROY, Mich., June 3, 2020 /PRNewswire/ -- Meritor, Inc. (NYSE: MTOR) today announced actions designed to enhance the financial position of the company in light of current market conditions resulting from the COVID-19 pandemic. "It remains too early to forecast the long-term impact of this…