Snap-On Incorporated delivers products and services, including hand and power tools, tool storage, diagnostics software, information and management systems, shop equipment and other solutions for vehicle dealerships and repair centers, as well as for customers in industries, including aviation and aerospace, agriculture, construction, government and military, mining, natural resources, power generation and technical education. The company was founded in 1920 and is based in Kenosha, Wisconsin.
SNA Price Forecast Based on DCF Valuation
DCF Fair Value Target:
We started the process of determining a valid price forecast for Snap-on Inc with a discounted cash flow analysis -- the results of which can be found in the table below. To summarize, we found that Snap-on Inc ranked in the 52th percentile in terms of potential gain offered. More precisely, our analysis suggests the stock is undervalued by approximately 24.83% on a DCF basis. In terms of the factors that were most noteworthy in this DCF analysis for SNA, they are:
SNA'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 35.41% of tickers in our DCF set.
Snap-on Inc's interest coverage rate -- a measure of gross earnings relative to interest payments -- comes in at 18.78. This coverage rate is greater than that of 85.91% of stocks we're observing for the purpose of forecasting via discounted cash flows.
Relative to other stocks in its sector (Industrials), Snap-on Inc has a reliance on debt greater than only 23.09% of them.
Terminal Growth Rate in Free Cash Flow
Return Relative to Current Share Price
For other companies in the Industrials that have a similar discounted cashflow valuation profile (and ensuing price forecasts) as SNA, try GTMAY, MSM, RGR, WCC, and CCL.