ASX:IPL

Stock Analysis Report

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Market Cap

AU$5.2b

Last Updated

2021/08/02 08:06 UTC

Data Sources

Company Financials +

Executive Summary

Incitec Pivot Limited manufactures and distributes industrial explosives, industrial chemicals, and fertilizers in Australia, the United States, Canada, Turkey, and internationally. More Details


Snowflake Analysis

Fair value with mediocre balance sheet.

Share Price & News

How has Incitec Pivot's share price performed over time and what events caused price changes?


Latest Share Price and Events

Stable Share Price: IPL is less volatile than 75% of Australian stocks over the past 3 months, typically moving +/- 5% a week.

Volatility Over Time: IPL's weekly volatility (5%) has been stable over the past year.


Market Performance


7 Day Return

5.8%

IPL

-1.0%

AU Chemicals

-0.1%

AU Market


1 Year Return

46.3%

IPL

-1.1%

AU Chemicals

27.3%

AU Market

Return vs Industry: IPL exceeded the Australian Chemicals industry which returned -1.1% over the past year.

Return vs Market: IPL exceeded the Australian Market which returned 27.3% over the past year.


Shareholder returns

IPLIndustryMarket
7 Day5.8%-1.0%-0.1%
30 Day14.1%-0.9%0.9%
90 Day3.8%-6.2%4.5%
1 Year46.9%46.3%-0.1%-1.1%31.9%27.3%
3 Year-25.4%-28.0%-24.6%-27.6%32.7%16.8%
5 Year8.4%-0.7%-8.2%-16.1%62.5%31.0%

Long-Term Price Volatility Vs. Market

How volatile is Incitec Pivot's share price compared to the market and industry in the last 5 years?


Simply Wall St News

Valuation

Is Incitec Pivot undervalued compared to its fair value and its price relative to the market?

>50%

Undervalued compared to fair value


Share Price vs. Fair Value

Below Fair Value: IPL (A$2.75) is trading below our estimate of fair value (A$5.67)

Significantly Below Fair Value: IPL is trading below fair value by more than 20%.


Price To Earnings Ratio

PE vs Industry: IPL is poor value based on its PE Ratio (54.9x) compared to the Australian Chemicals industry average (53.5x).

PE vs Market: IPL is poor value based on its PE Ratio (54.9x) compared to the Australian market (20.5x).


Price to Earnings Growth Ratio

PEG Ratio: IPL is poor value based on its PEG Ratio (3x)


Price to Book Ratio

PB vs Industry: IPL is good value based on its PB Ratio (1x) compared to the AU Chemicals industry average (3.2x).


Future Growth

How is Incitec Pivot forecast to perform in the next 1 to 3 years based on estimates from 11 analysts?

18.2%

Forecasted annual earnings growth


Earnings and Revenue Growth Forecasts


Analyst Future Growth Forecasts

Earnings vs Savings Rate: IPL's forecast earnings growth (18.2% per year) is above the savings rate (1.9%).

Earnings vs Market: IPL's earnings (18.2% per year) are forecast to grow faster than the Australian market (13.6% per year).

High Growth Earnings: IPL's earnings are forecast to grow, but not significantly.

Revenue vs Market: IPL's revenue (1.5% per year) is forecast to grow slower than the Australian market (5.3% per year).

High Growth Revenue: IPL's revenue (1.5% per year) is forecast to grow slower than 20% per year.


Earnings per Share Growth Forecasts


Future Return on Equity

Future ROE: IPL's Return on Equity is forecast to be low in 3 years time (7.8%).


Past Performance

How has Incitec Pivot performed over the past 5 years?

-12.6%

Historical annual earnings growth


Earnings and Revenue History

Quality Earnings: IPL has a large one-off loss of A$56.5M impacting its March 31 2021 financial results.

Growing Profit Margin: IPL's current net profit margins (2.5%) are lower than last year (4.3%).


Past Earnings Growth Analysis

Earnings Trend: IPL's earnings have declined by 12.6% per year over the past 5 years.

Accelerating Growth: IPL's has had negative earnings growth over the past year, so it can't be compared to its 5-year average.

Earnings vs Industry: IPL had negative earnings growth (-45.6%) over the past year, making it difficult to compare to the Chemicals industry average (-45.6%).


Return on Equity

High ROE: IPL's Return on Equity (1.8%) is considered low.


Financial Health

How is Incitec Pivot's financial position?


Financial Position Analysis

Short Term Liabilities: IPL's short term assets (A$1.3B) exceed its short term liabilities (A$1.2B).

Long Term Liabilities: IPL's short term assets (A$1.3B) do not cover its long term liabilities (A$2.4B).


Debt to Equity History and Analysis

Debt Level: IPL's debt to equity ratio (31%) is considered satisfactory.

Reducing Debt: IPL's debt to equity ratio has reduced from 50.2% to 31% over the past 5 years.

Debt Coverage: IPL's debt is not well covered by operating cash flow (18.1%).

Interest Coverage: IPL's interest payments on its debt are not well covered by EBIT (2.2x coverage).


Balance Sheet


Dividend

What is Incitec Pivot current dividend yield, its reliability and sustainability?

0.73%

Current Dividend Yield


Dividend Yield vs Market

Notable Dividend: IPL's dividend (0.73%) isn’t notable compared to the bottom 25% of dividend payers in the Australian market (1.99%).

High Dividend: IPL's dividend (0.73%) is low compared to the top 25% of dividend payers in the Australian market (4.98%).


Stability and Growth of Payments

Stable Dividend: IPL is not paying a notable dividend for the Australian market, therefore no need to check if payments are stable.

Growing Dividend: IPL is not paying a notable dividend for the Australian market, therefore no need to check if payments are increasing.


Current Payout to Shareholders

Dividend Coverage: IPL is not paying a notable dividend for the Australian market.


Future Payout to Shareholders

Future Dividend Coverage: No need to calculate the sustainability of IPL's dividend in 3 years as they are not forecast to pay a notable one for the Australian market.


Next Steps

Management

How experienced are the management team and are they aligned to shareholders interests?

2.5yrs

Average management tenure


CEO

Jeanne Johns (58 yo)

3.75yrs

Tenure

AU$2,763,000

Compensation

Ms. Jeanne M. Johns, B.S. Chemical Engineering, magna cum laude has been Managing Director and Chief Executive Officer of Incitec Pivot Limited since November 15, 2017. Ms. Johns served as the Head of Safe...


CEO Compensation Analysis

Compensation vs Market: Jeanne's total compensation ($USD2.03M) is about average for companies of similar size in the Australian market ($USD1.70M).

Compensation vs Earnings: Jeanne's compensation has been consistent with company performance over the past year.


Leadership Team

Experienced Management: IPL's management team is considered experienced (2.5 years average tenure).


Board Members

Experienced Board: IPL's board of directors are not considered experienced ( 1.8 years average tenure), which suggests a new board.


Ownership

Who are the major shareholders and have insiders been buying or selling?


Insider Trading Volume

Insider Buying: Insufficient data to determine if insiders have bought more shares than they have sold in the past 3 months.


Recent Insider Transactions

Ownership Breakdown

Dilution of Shares: Shareholders have not been meaningfully diluted in the past year.


Top Shareholders

Company Information

Incitec Pivot Limited's company bio, employee growth, exchange listings and data sources


Key Information

  • Name: Incitec Pivot Limited
  • Ticker: IPL
  • Exchange: ASX
  • Founded: 1831
  • Industry: Diversified Chemicals
  • Sector: Materials
  • Market Cap: AU$5.205b
  • Shares outstanding: 1.94b
  • Website: https://www.incitecpivot.com.au

Number of Employees


Location

  • Incitec Pivot Limited
  • 28 Freshwater Place
  • Level 8
  • Southbank
  • Victoria
  • 3006
  • Australia

Listings


Biography

Incitec Pivot Limited manufactures and distributes industrial explosives, industrial chemicals, and fertilizers in Australia, the United States, Canada, Turkey, and internationally. The company manufacture...


Company Analysis and Financial Data Status

All financial data provided by Standard & Poor's Capital IQ.
DataLast Updated (UTC time)
Company Analysis2021/08/02 08:06
End of Day Share Price2021/08/02 00:00
Earnings2021/03/31
Annual Earnings2020/09/30


Unless specified all financial data is based on a yearly period but updated quarterly. This is known as Trailing Twelve Month (TTM) or Last Twelve Month (LTM) Data. Learn more here.