Krones AG : Undervalued relative to peers, but don’t ignore the other factors

Krones AG relative valuation is now UNDERVALUED. It was previously rated NEUTRAL, and has a fundamental analysis score of 53.

Our analysis is based on comparing Krones AG with the following peers – EnPro Industries, Inc., Actuant Corporation Class A, Graco Inc. and Gorman-Rupp Company (NPO-US, ATU-US, GGG-US and GRC-US).

Relative Valuation

Krones AG’s price of USD 51.01 is lower than CapitalCube’s implied price of USD 54.75. CapitalCube believes that at these levels, Krones AG is undervalued and has upside potential. Over the last 52 week period, the stock has fluctuated between USD 47.03 and USD 62.26.

Relative Valuation

Company Overview

  • With respect to peers, relative outperformance over the last year is in contrast to the more recent underperformance.
  • Krones AG Unsponsored ADR currently trades at a higher Price/Book ratio (2.77) than its peer median (2.18).
  • We classify KRNTY-US as Harvesting because of the market’s relatively low growth expectations despite its relatively high returns.
  • KRNTY-US‘s median net profit margins and relatively high asset efficiency give it some operating leverage.
  • Compared with its chosen peers, changes in the company’s annual earnings are better than the changes in its revenue, implying better than median cost control and/or some economies of scale.
  • KRNTY-US‘s return on assets has improved from below median to about median among its peers over the last five years.
  • The company’s relatively low gross margin and median pre-tax margin suggest operations may be constrained on pricing versus peers.
  • While KRNTY-US‘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 capital investment seems appropriate for a business with peer median returns.
  • KRNTY-US currently does not have any debt.

Investment Outlook

Krones AG has a fundamental score of 53 and has a relative valuation of UNDERVALUED.

Krones AG’s Fundamental Analysis Score is about average at 53, thus not allowing for a specific classification into the Value – Price Matrix.

Fundamentals Vs Relative Valuation

Quadrant label definitions. Hover to know more

Safety, Value Play, Value Trap, Speculative

Drivers of Valuation

KRNTY-US has a Harvesting profile relative to its peers.

We classify KRNTY-US as Harvesting because of the market’s low expectations of growth (P/E of 18.78 compared to peer median of 24.97) despite its relatively high returns (ROE of 14.45% compared to the peer median ROE of 8.83%).

The company currently trades at a higher Price/Book ratio of 2.77 compared to its peer median of 2.18.

Valuation Drivers

Quadrant label definitions. Hover to know more

Outperforming, Harvesting, Challenged, Turnaround

KRNTY-US has maintained its Harvesting profile from the recent year-end.

ROE % (On Common Equity)
Price To Earnings

Peer Analysis

A complete list of valuation metrics is available on the company page.

Company Profile

Krones AG engages in the production of machineries and systems for filling and packaging and for beverage production. The company operates through the following segments: Product Filing and Decoration, Beverage Production/Process Technology, and Low Output Range (KOSME) segments. The Product Filing and Decoration segment offers machines and complete lines for filling, packaging, labeling, and conveying products. The Beverage Production/Process Technology segment includes brewhouse and cellar systems. The Low Output Range (KOSME) segment offers a product range that caters smaller and mid-sized companies that do not need high-speed machines. The company was founded by Hermann Kronseder and is headquartered in Neutraubling, Germany.


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