Valuecruncher recently completed a valuation of Fletcher Building ($FBU.NZ). Since then the company has announced reduced earnings expectations for the 2009 financial year.

When Valuecruncher completed our valuation the $FBU.NZ was trading at NZ$6.20 - and we produced a valuation of NZ$7.24. Today $FBU.NZ closed at NZ$5.56.

With the additional guidance we decided to revisit our valuation.

We kept all our previous assumptions constant but revised our profitability assumptions. Reuters has $FBU.NZ’s EBITD margin at 13.0% last year and an average of 14.2% for the last five-years.

For our analysis we have lowered our 2009 EBITDA margin to 9.0% with 2010 at 11.0% and 2011 at 12.0%.

Revised Valuecruncher valuation model of FBU.NZ with interactive assumptions

This adjustment produces a valuation of NZ$5.98 - 7.6% above the current share price of NZ$5.56.

Our analysis incorporates the cash and debt the FBU.NZ balance sheet – Valuecruncher calculates a net debt number.

Play with our assumptions – what does your analysis say?

Disclosure: None

Tags: FBU, NZX

This entry was posted on Wednesday, November 12th, 2008 at 9:22 am and is filed under Fletcher Building, NZX. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.