SPX Corporation provides specialized engineered solutions worldwide. It engineers, designs, manufactures, installs, and services thermal heat transfer products, such as dry, evaporative, and hybrid cooling systems; rotating and stationary heat exchangers; and pollution control systems for the power generation, HVAC, and industrial markets, as well as personal comfort heating products for the residential and commercial markets. The company is based in Charlotte, North Carolina.
SPXC 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 Spx Corp. To summarize, we found that Spx Corp ranked in the 20th percentile in terms of potential gain offered. Our DCF analysis suggests the stock is overvalued by about 72.33%. In terms of the factors that were most noteworthy in this DCF analysis for SPXC, they are:
The stock's equity weight, or the proportion of capital from equity relative to debt, is 80. Its equity weight surpasses that of 61.15% of free cash flow generating stocks in the Industrials sector.
The company's compound free cash flow growth rate over the past 5.76 years comes in at -0.13%; that's greater than only 14.16% of US stocks we're applying DCF forecasting to.
Spx Corp's interest coverage rate -- a measure of gross earnings relative to interest payments -- comes in at 6.08. This coverage rate is greater than that of 63.76% 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
MIC, PNR, WLFC, DXPE, and ENR can be thought of as valuation peers to SPXC, in the sense that they are in the Industrials sector and have a similar price forecast based on DCF valuation.
SPX Corporation (SPXC) President and Chief Executive Officer Gene Lowe will present today, June 3, 2020 at the UBS Global Industrials and Transportation Conference in a virtual format. The accompanying slide presentation is available in the Investor Relations section of the website. SPX continues to see quarter-to-date performance for Q2 2020 consistent with commentary provided on its Q1 2020 earnings call on April 30, 2020, including an anticipated organic adjusted revenue* decline of approximately 10 percent, partially offset by the benefit of acquisitions completed in the second half of 2019.
Ladies and gentlemen, thank you for standing by, and welcome to the SPX Corporation first-quarter 2020 earnings conference call. With me on the call today are Gene Lowe, our president and chief executive officer; and Scott Sproule, our chief financial officer.