Industrials
Poor risk/reward - to justify its current price ($14), MWA must improve its NOPAT margin to 8% and grow revenue by 9% (well above 10-year CAGR of 2%) compounded annually through 2032. In this scenario, NOPAT would equal $236m in 2032, or over 2x its highest-ever NOPAT achieved in 2019. New Constructs considers these expectations to be overly optimistic. Even if the group maintains its NOPAT margin at TTM levels of 7% and grows revenue 5% compounded annually through 2032, the stock would be worth no more than $8 today (40% downside).
Edition: 167
- 18 August, 2023