As of May 31, 2025, Finning International Inc has a Discounted Cash Flow (DCF) derived fair value of $49.78 per share. With the current market price at $50.25, this represents a potential upside of -0.9%.
| Key Metrics | Value |
|---|---|
| DCF Fair Value (5-year) | $51.13 |
| DCF Fair Value (10-year) | $49.78 |
| Potential Upside (5-year) | 1.8% |
| Potential Upside (10-year) | -0.9% |
| Discount Rate (WACC) | 6.8% - 8.8% |
Revenue is projected to grow from $11206 million in 12-2024 to $16738 million by 12-2034, representing a compound annual growth rate of approximately 4.1%.
| Fiscal Year | Revenue (USD millions) | Growth |
|---|---|---|
| 12-2024 | 11206 | 6% |
| 12-2025 | 10407 | -7% |
| 12-2026 | 10632 | 2% |
| 12-2027 | 10997 | 3% |
| 12-2028 | 11312 | 3% |
| 12-2029 | 11980 | 6% |
| 12-2030 | 12925 | 8% |
| 12-2031 | 14106 | 9% |
| 12-2032 | 15380 | 9% |
| 12-2033 | 16249 | 6% |
| 12-2034 | 16738 | 3% |
Net profit margin is expected to improve from 5% in 12-2024 to 4% by 12-2034, driven by operational efficiency and economies of scale.
| Fiscal Year | Net Profit (USD millions) | Profit Margin |
|---|---|---|
| 12-2024 | 506 | 5% |
| 12-2025 | 465 | 4% |
| 12-2026 | 475 | 4% |
| 12-2027 | 492 | 4% |
| 12-2028 | 506 | 4% |
| 12-2029 | 536 | 4% |
| 12-2030 | 578 | 4% |
| 12-2031 | 631 | 4% |
| 12-2032 | 688 | 4% |
| 12-2033 | 727 | 4% |
| 12-2034 | 748 | 4% |
with a 5-year average of $158 million. Projected CapEx is expected to maintain at approximately 2% of revenue.
Depreciation is based on an average useful life of 5 years for capital assets.
| Fiscal Year | D&A (USD millions) |
|---|---|
| 12-2025 | 173 |
| 12-2026 | 184 |
| 12-2027 | 190 |
| 12-2028 | 186 |
| 12-2029 | 199 |
| 12-2030 | 208 |
Net working capital is expected to increase gradually, with projected changes affecting free cash flow.
| Components | Average Days |
|---|---|
| Days Receivables | 56 |
| Days Inventory | 122 |
| Days Payables | 0 |
| Fiscal Year | EBITDA | Tax | CapEx | Change in NWC | FCF |
|---|---|---|---|---|---|
| 9M/2025 | 692 | 113 | 140 | (25) | 463 |
| 2026 | 950 | 154 | 191 | 12 | 594 |
| 2027 | 982 | 159 | 197 | 108 | 518 |
| 2028 | 1001 | 164 | 203 | 185 | 449 |
| 2029 | 1061 | 173 | 215 | 248 | 425 |
| Valuation Method | Fair Price (USD) | Potential Upside |
|---|---|---|
| 5-Year DCF (Growth) | 51.13 | 1.8% |
| 10-Year DCF (Growth) | 49.78 | -0.9% |
| 5-Year DCF (EBITDA) | 41.29 | -17.8% |
| 10-Year DCF (EBITDA) | 48.86 | -2.8% |
Is Finning International Inc (FTT.TO) a buy or a sell? Finning International Inc is definitely a sell. Based on our DCF analysis, Finning International Inc (FTT.TO) appears to be fairly valued with upside potential of -0.9%. The company's strong projected growth in revenue and profitability, coupled with consistent capital expenditure, supports our positive outlook on its intrinsic value.
Key investment drivers include:
Investors should consider a hold at the current market price of $50.25.