Neenah Paper produces image and performance-based products, including filtration, specialized substrates used for tapes, labels and other products, and high-end printing papers. The company was founded in 2004 and is based in Alpharetta, Georgia.
NP Price Forecast Based on DCF Valuation
DCF Fair Value Target:
We started the process of determining a valid price forecast for Neenah Inc with a discounted cash flow analysis -- the results of which can be found in the table below. To summarize, we found that Neenah Inc ranked in the 44th percentile in terms of potential gain offered. Moreover, under all the scenarios we modelled, the output consistently forecasted positive returns. In terms of the factors that were most noteworthy in this DCF analysis for NP, they are:
The compound growth rate in the free cash flow of Neenah Inc over the past 5.55 years is 0%; that's better than only 24.88% of cash flow producing equities in the Basic Materials sector, where it is classified.
76% of the company's capital comes from equity, which is greater than 59.11% of stocks in our cash flow based forecasting set.
Neenah Inc's interest coverage rate -- a measure of gross earnings relative to interest payments -- comes in at 6.64. This coverage rate is greater than that of 63.05% of stocks we're observing for the purpose of forecasting via discounted cash flows.
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 NP, try SXC, LYB, BHP, CCF, and PPG.