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HD looking sharp with a 3% yield forecast
HD Current 269 Target 461 + 71%
Jun 23, 2022
1 minute read
Sales grew 9%
Last 5 quarters
16% 10% -10% -3% 9%
Costs down profit up
Last 5 quarters
-87% -86% -87% -89% -87%
Cashflow higher
Last 5 quarters million dollars
5,782, 2,707, 2,765, 2,348, 3,088
Balance sheet net cash worsened
Last 5 quarters million dollars
-64,171 -64,134 -66,929 -71,229 -75,432
Capital paid improved , a 71% higher target price
Last 5 quarters million dollars
42,141, 46,905, 49,180, 54,191, 56,770
Jun 23, 2022
1 minute read
Sales grew 9%
Last 5 quarters
16% 10% -10% -3% 9%
- Sales grew 9% in the first quarter to 38,908 million dollars -2% below our 39,692 million dollars forecast.
- This brings the average to 1% growth.
- We predict faster average growth of 3% in this next 12 months to bring sales to 42,864 million dollars in the first quarter 2023.
Costs down profit up
Last 5 quarters
-87% -86% -87% -89% -87%
- The cash cost ratio went from -89% to -87% profit from 3,352 to 4,231 million dollars in the first quarter.
- The average cost ratio is at -87% now.
- We use the average -87% cost ratio to predict a higher 4,623 million dollars profit in the first quarter 2023.
Cashflow higher
Last 5 quarters million dollars
5,782, 2,707, 2,765, 2,348, 3,088
- Free cashflow went from 2,348 to 3,088 million dollars in the first quarter with -701 million dollars investment spending.
- Average quarterly Cashflow is at 2,727 million dollars now.
- We assume the same -701 million dollars investment spending which with higher sales gives a record 4,840 million dollars Cashflow in the first quarter 2023.
Balance sheet net cash worsened
Last 5 quarters million dollars
-64,171 -64,134 -66,929 -71,229 -75,432
- Cash increased 2,343 to 2,844 million dollars in the first quarter.
- Liabilities increased 73,572 to 78,276 million dollars so net cash worsened -71,229 to -75,432 million dollars .
- With our forecast cashflow & a -9,055 million dollars equity payout -9,923 million dollars liabilities payment net cash will be -65,509 million dollars in 12 months time.
Capital paid improved , a 71% higher target price
Last 5 quarters million dollars
42,141, 46,905, 49,180, 54,191, 56,770
- HD 21 quarter capital paid improved 54,191 to 56,770 million dollars in the first quarter with + 1,868 million dollars liabilities -4,265 million dollars equity & will be 75,748 million dollars in12 months time.
- At the current market value of 276,899 million dollars based on our forecasts it’s at 3.66 X assets with a 4 years payback & a 3% yield.
- Our cashflow forecast is 18,978 million dollars which means a 15 X valuation. A 25 X valuation gives a 71% higher target price 461 dollars.