- If you are wondering whether Modine Manufacturing's current share price actually lines up with its underlying worth, you are not alone. This article is going to focus squarely on what the numbers say about value.
- The stock last closed at US$238.50, with returns of 7.2% over 7 days, 29.2% over 30 days, 69.4% year to date and 209.2% over 1 year, while the 3 year return is very large and the 5 year return is around 15x.
- Recent news around Modine Manufacturing has largely centered on its role in capital goods and thermal management solutions. This has kept attention on how its end markets and product mix might influence expectations for future cash flows, and it helps frame why the share price has been moving so sharply over multiple timeframes.
- Modine Manufacturing currently has a valuation score of 2 out of 6, which means it screens as undervalued on 2 of the 6 checks we will walk through next. We will also look at a more complete way to think about valuation at the end of the article.
Modine Manufacturing scores just 2/6 on our valuation checks. See what other red flags we found in the full valuation breakdown.
Approach 1: Modine Manufacturing Discounted Cash Flow (DCF) Analysis
A Discounted Cash Flow, or DCF, model estimates what a business could be worth by projecting its future cash flows and discounting them back to today’s dollars. It is essentially asking what Modine Manufacturing’s future cash generation might be worth right now.
For Modine Manufacturing, the model used is a 2 Stage Free Cash Flow to Equity approach, based on cash flow projections in US$. The latest twelve month free cash flow is reported at about $2.83 million. Analysts provide explicit estimates out to 2028, where free cash flow is projected at $360.8 million, and Simply Wall St then extrapolates out to 2035 using its own assumptions to complete a ten year cash flow path.
Adding up those discounted cash flows gives an estimated intrinsic value of about $241.16 per share. Compared with the recent share price of $238.50, the DCF implies the stock trades at roughly a 1.1% discount, which is a very small gap and well within any reasonable margin of error.
Result: ABOUT RIGHT
Modine Manufacturing is fairly valued according to our Discounted Cash Flow (DCF), but this can change at a moment's notice. Track the value in your watchlist or portfolio and be alerted on when to act.
Approach 2: Modine Manufacturing Price vs Earnings
For a profitable business, the P/E ratio is a straightforward way to connect what you are paying for the stock with the earnings it is currently generating. It helps you see how many dollars investors are willing to pay today for each dollar of earnings.
What counts as a “normal” P/E often reflects two big forces: how strong investors think future earnings growth could be, and how risky those earnings appear. Higher expected growth or lower perceived risk can justify a higher P/E, while slower growth or higher risk usually calls for a lower one.
Modine Manufacturing currently trades on a P/E of 128.59x. That is well above the Building industry average of 23.00x and also higher than the peer group average of 28.38x. Simply Wall St’s Fair Ratio for Modine Manufacturing is 130.82x, which is its proprietary estimate of what a reasonable P/E could be after weighing factors such as earnings growth profile, industry, profit margins, market capitalization and risk characteristics. This Fair Ratio can offer a more tailored anchor than broad industry or peer comparisons because it adjusts for these company specific inputs. With the actual P/E at 128.59x and the Fair Ratio at 130.82x, the two are very close, which points to the shares being priced broadly in line with this metric.
Result: ABOUT RIGHT
P/E ratios tell one story, but what if the real opportunity lies elsewhere? Start investing in legacies, not executives. Discover our 19 top founder-led companies.
Upgrade Your Decision Making: Choose your Modine Manufacturing Narrative
Earlier we mentioned that there is an even better way to understand valuation. Narratives on Simply Wall St let you attach your own story about Modine Manufacturing to the numbers by linking what you think is happening with data center cooling, refrigeration or legacy businesses to a clear forecast for revenue, earnings and margins. This then flows through to a Fair Value you can compare with the current share price to help decide whether the stock looks attractive or stretched, all inside an easy to use tool on the Community page that automatically refreshes when new news or earnings land. One investor might build a Narrative closer to the higher US$251.14 fair value because they place more weight on data center demand and margin assumptions, while another might lean toward the lower US$145 price target if they focus more on execution risks and concentration in certain markets.
Do you think there's more to the story for Modine Manufacturing? Head over to our Community to see what others are saying!
This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.
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