Jungheinrich AG – Value Analysis (XETRA:JUN3) : December 26, 2017

Capitalcube gives Jungheinrich AG a score of 59.

Our analysis is based on comparing Jungheinrich AG with the following peers – KION GROUP AG, Gaussin SA, Ponsse Oyj, PALFINGER AG and Cargotec Oyj Class B (KGX-DE, ALGAU-FR, PON1V-FI, PAL-AT and CGCBV-FI).

Investment Outlook

Jungheinrich AG has a fundamental score of 59 and has a relative valuation of NEUTRAL.

Fundamental Score

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Company Overview

  • Considering peers, relative outperformance over the last year and the last month suggest a leading position.
  • It trades at a lower Price/Book multiple (1.62) than its peer median (2.03).
  • We classify JUN3-DE as Harvesting because of the market’s relatively low growth expectations despite its relatively high returns.
  • JUN3-DE‘s relative asset efficiency and net profit margins are both around the median level.
  • The company’s year-on-year change in revenues and earnings are better than the median among its peer group.
  • JUN3-DE‘s return on assets currently and over the past five years is around the peer median and suggest that it does not have any particular operational advantages versus peers.
  • The company’s margins are around the peer medians and do not suggest any benefit from a pricing or an operating cost advantage versus peers.
  • While JUN3-DE‘s revenues growth in recent years has been around the peer median, the stock’s below peer median P/E ratio suggests that the market likely sees the company’s long-term growth prospects to be fading.
  • The company’s level of capital investment is relatively low and suggests it is milking the business.
  • JUN3-DE has the financial and operating capacity to borrow quickly.

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Leverage & Liquidity

JUN3-DE has the financial and operating capacity to borrow quickly.

  • With debt at a relatively low 9.51% of its enterprise value compared to an overall benchmark of 25% (Note: The peer median is currently 23.68%), and a well-cushioned interest coverage level of 14.35x, JUN3-DE can probably borrow quickly. We classify the company as Quick & Able in terms of its capacity to raise additional debt.
  • All 5 peers for the company have an outstanding debt balance.

JUN3-DE has maintained its Quick & Able profile from the prior year-end.

  • JUN3-DE‘s interest coverage has declined 5.87 points from last year’s high and is now close to its four-year average interest coverage.
  • The decrease in its interest coverage to 14.35x from 20.22x (in 2015) was also accompanied by a decrease in its peer median during this period to 7.61x from 8.35x.
  • Interest coverage fell 5.14 points relative to peers.
  • JUN3-DE‘s debt-EV is its lowest over the last four years and compares to a high of 41.88% in 2012.
  • Like the interest coverage trend, the decrease in its debt-EV (to 9.51% from 12.55%) was also accompanied by a decrease in its peer median during this period (to 23.68% from 29.24%).
  • Relative to peers, debt-EV rose 2.51 percentage points.

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Key Liquidity Items

Company Debt/Enterprise Value (%) Current Ratio Interest Coverage (x) Cash Flow To Total Debt (%)
KION GROUP AG 27.61 0.94 2.14 27.56
Gaussin SA 68.32 0.77 -9.13 -45.52
Ponsse Oyj 10.35 1.74 62.33 86.04
PALFINGER AG 29.77 1.75 7.48 33.15
Cargotec Oyj Class B 19.74 1.47 7.74 29.56
Jungheinrich AG Pref 9.51 1.46 14.35 47.55
Peer Median 23.68 1.46 7.61 31.36
Best In Class 9.51 1.75 62.33 86.04

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Company Profile

Jungheinrich AG engages in the manufacture and supply of products for the material handling equipment, warehousing and material flow engineering sectors. It operates through the Intralogistics and Financial Services segments. The Intralogistics segment is involved in the development, production, sale, and short-term hire of new material handling equipment and warehousing technology products including logistics systems as well as the sale and short-term hire of used equipment and after-sales services, consisting of maintenance, repair, and spare parts. The Financial Services segment Includes the pan-European sales financing and usage transfer if material handling equipment and warehousing technology products. The company was founded by Friedrich Jungheinrich on August 7, 1953 and is headquartered in Hamburg, Germany.

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