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HAL, sales jumped 11%
Current 29 Target 37 +30%
January 25 2022
1 minute read
Sales jumped 11%
Costs up profit up on non cash gains
Cashflow lower on higher investment, but average rising
Balance sheet lower leverage
Valuation, a 30% higher target price
1 minute read
Sales jumped 11%
- Sales jumped 11% in the fourth quarter to 4,277 million dollars & are up 34% from a year ago.
- This brings the quarterly average to 7% growth.
- We predict average growth of 7% in this next 12 months to bring sales to 5,658 million dollars in the fourth quarter of 2022.
Costs up profit up on non cash gains
- The cash cost ratio went from -86% to -89% but profit jumped from 240 to 827 million dollars in the fourth quarter on non cash gains.
- The average cost ratio is at -90% now.
- We use the latest -89% cost ratio to predict a 593 million dollars profit in the fourth quarter of 2022.
Cashflow lower on higher investment, but average rising
- Free cashflow went from 530 to 456 million dollars in the fourth quarter with higher -226 million dollars investment Cashflow.
- Average quarterly Cashflow is at 344 million dollars now.
- We assume lower -157 million dollars investment spending which with higher sales gives a 475 million dollars Cashflow in the fourth quarter of 2022.
Balance sheet lower leverage
- Cash increased 2,632 to 3,044 million dollars in the fourth quarter.
- Liabilities increased 15,332 to 15,593 million dollars so net cash improved -12,700 to -12,549 million dollars
- With our forecast cashflow & a -642 million dollars equity payout -1,026 million dollars liabilities payment net cash will be -11,523 million dollars in 12 months time.
Valuation, a 30% higher target price
- HAL capital paid from the last 12 quarters improved 2,512 to 2,540 million dollars in the fourth quarter with a -24 million dollars equity payout & will be 4,207 million dollars in12 months time.
- At the current market value of 25,590 million dollars based on our forecasts it’s at 1.12 X assets with a 12 years payback & a 2.5% yield.
- Our cashflow forecast is 1,667 million dollars which means an 15 X valuation. A 20 X valuation gives a 30% higher target price of 37 dollars.