Toro Company is a worldwide provider of innovative solutions for the outdoor environment including turf, snow and ground engaging equipment, and irrigation and outdoor lighting solutions. The company was founded in 1914 and is based in Bloomington, Minnesota.
TTC Price Forecast Based on DCF Valuation
DCF Fair Value Target:
We started the process of determining a valid price forecast for Toro Co with a discounted cash flow analysis -- the results of which can be found in the table below. To summarize, we found that Toro Co ranked in the 37th percentile in terms of potential gain offered. We should note, though, that the most conservative analysis suggests this stock will yield negative results -- and thus may be a potential short opportunity. The most interesting components of our discounted cash flow analysis for Toro Co ended up being:
The company's balance sheet shows it gets 91% of its capital from equity, and 9% of its capital from debt. Its equity weight surpasses that of 81% of free cash flow generating stocks in the Industrials sector.
The business' balance sheet reveals debt to be 9% of the company's capital (with equity being the remaining amount). Approximately merely 22.69% of US stocks with free cash flow have a lower reliance on debt in their capital structure.
TTC'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 37.09% of tickers in our DCF set.
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 TTC, try JCI, LSTR, NSSC, RSG, and WCN.
Residential Does Well, But Professional Segment Holds Back The Company I reviewed The Toro Company (TTC) last quarter, rating it Neutral with the stock trading at $73.47 at the time. It was not a Buy at that level because sales declines in the larger and higher-margin Professional segment were more...