Waters Corporation designs, manufactures, distributes and services instrument systems, columns and other chemistry consumables that are integrated and used along with other analytical instruments. The Company has two segments: Waters Division and TA Division. The company was founded in 1958 and is based in Milford, Massachusetts
WAT 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 Waters Corp. To summarize, we found that Waters Corp ranked in the 24th percentile in terms of potential gain offered. We should note, though, that all scenearios modelled for this stock suggest it is overvalued. In terms of the factors that were most noteworthy in this DCF analysis for WAT, they are:
WAT'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 34.17% of tickers in our DCF set.
Waters Corp's interest coverage rate -- a measure of gross earnings relative to interest payments -- comes in at 13.08. This coverage rate is greater than that of 80.58% of stocks we're observing for the purpose of forecasting via discounted cash flows.
The weighted average cost of capital for the company is 8. This value is greater than only 23.73% stocks in the Healthcare sector that generate free cash flow.
Terminal Growth Rate in Free Cash Flow
Return Relative to Current Share Price
GTS, PKI, VIVO, SNN, and ILMN can be thought of as valuation peers to WAT, in the sense that they are in the Healthcare sector and have a similar price forecast based on DCF valuation.
A few days ago, I started my series “Hidden Stock Market Gems” in which I am describing several publicly traded companies that don’t get much attention on Seeking Alpha although these are companies with a stable business model and a wide economic moat around the business. This leads not only...
Waters Corporation (NYSE:WAT) Christopher J. O’Connell, President and Chief Executive Officer, will speak to the investment community at the Jefferies Virtual Healthcare Conference Tuesday June 2nd, 2020 at 8:00 a.m. Eastern Time.