Weir Group (LSE:WEIR) - Share price, News & Analysis

Q: What is the Fair Price of WEIR when looking at its future cash flows? For this estimate we use a Discounted Cash Flow model.

WEIR (£16.61) is trading below our estimate of [[fair value]] (£20.64)

WEIR fundamental analysis
Snowflake Score
Valuation	3/6
Future Growth	3/6
Past Performance	4/6
Financial Health	4/6
Dividends	1/6

WEIR Stock Overview

The Weir Group PLC produces and sells highly engineered original equipment worldwide.

Rewards

Trading at 19.6% below our estimate of its fair value

Earnings are forecast to grow 13.75% per year

Earnings have grown 4.9% per year over the past 5 years

Risk Analysis

Debt is not well covered by operating cash flow

Weir Group Competitors

IMI

LSE:IMI

UK£3.3b

Rotork

LSE:ROR

UK£2.3b

Spirax-Sarco Engineering

LSE:SPX

UK£8.6b

Bodycote

LSE:BOY

UK£1.2b

Price History & Performance

Summary of all time highs, changes and price drops for Weir Group
Historical stock prices
Current Share Price	UK£16.61
52 Week High	UK£19.37
52 Week Low	UK£13.21
Beta	1.67
1 Month Change	21.03%
3 Month Change	9.86%
1 Year Change	-1.69%
3 Year Change	31.63%
5 Year Change	-4.84%
Change since IPO	407.80%

Recent News & Updates

Jul 31

Weir Group's (LON:WEIR) Upcoming Dividend Will Be Larger Than Last Year's

The Weir Group PLC's ( LON:WEIR ) dividend will be increasing from last year's payment of the same period to £0.135 on...

Shareholder Returns

	WEIR	GB Machinery	GB Market
7D	0.03%	-1.1%	-0.3%
1Y	-1.7%	-21.7%	-9.1%

Return vs Industry: WEIR exceeded the UK Machinery industry which returned -20.8% over the past year.

Return vs Market: WEIR exceeded the UK Market which returned -8.9% over the past year.

Price Volatility

Is WEIR's price volatile compared to industry and market?
WEIR volatility
WEIR Average Weekly Movement	5.6%
Machinery Industry Average Movement	5.2%
Market Average Movement	5.4%
10% most volatile stocks in GB Market	10.8%
10% least volatile stocks in GB Market	2.7%

Stable Share Price: WEIR is not significantly more volatile than the rest of UK stocks over the past 3 months, typically moving +/- 6% a week.

Volatility Over Time: WEIR's weekly volatility (6%) has been stable over the past year.

About the Company

Founded	Employees	CEO	Website
1871	11,994	Jon Stanton	https://www.global.weir

The Weir Group PLC produces and sells highly engineered original equipment worldwide. It operates in two segments, Minerals and ESCO. The Minerals segment offers slurry handling equipment and associated aftermarket support services for abrasive high-wear applications used in the mining and oil sands markets.

Weir Group Fundamentals Summary

How do Weir Group's earnings and revenue compare to its market cap?
WEIR fundamental statistics
Market Cap	UK£4.31b
Earnings (TTM)	UK£172.10m
Revenue (TTM)	UK£2.13b

25.0x

P/E Ratio

2.0x

P/S Ratio

Is WEIR overvalued?

See Fair Value and valuation analysis

Earnings & Revenue

Key profitability statistics from the latest earnings report
WEIR income statement (TTM)
Revenue	UK£2.13b
Cost of Revenue	UK£1.37b
Gross Profit	UK£763.60m
Other Expenses	UK£591.50m
Earnings	UK£172.10m

Last Reported Earnings

Jun 30, 2022

Next Earnings Date

n/a

Earnings per share (EPS)	0.66
Gross Margin	35.87%
Net Profit Margin	8.08%
Debt/Equity Ratio	79.0%

How did WEIR perform over the long term?

See historical performance and comparison

Dividends

1.6%

Current Dividend Yield

39%

Payout Ratio

Does WEIR pay a reliable dividends?

See WEIR dividend history and benchmarks

When do you need to buy WEIR by to receive an upcoming dividend?
Weir Group dividend dates
Ex Dividend Date	Oct 06 2022
Dividend Pay Date	Nov 04 2022
Days until Ex dividend	54 days
Days until Dividend pay date	83 days

Does WEIR pay a reliable dividends?

See WEIR dividend history and benchmarks

We’ve recently updated our valuation analysis.

Valuation

Is WEIR undervalued compared to its fair value, analyst forecasts and its price relative to the market?

Valuation Score

3/6

Valuation Score 3/6

Price-To-Earnings vs Peers
Price-To-Earnings vs Industry
Price-To-Earnings vs Fair Ratio
Below Fair Value
Significantly Below Fair Value
Analyst Forecast

Key Valuation Metric

Which metric is best to use when looking at relative valuation for WEIR?

Other financial metrics that can be useful for relative valuation.

The above table shows the n/a ratio for WEIR. This is calculated by dividing WEIR's market cap by their current preferred multiple.
What is WEIR's n/a Ratio?
n/a Ratio	0x
n/a	n/a
Market Cap	UK£4.31b

WEIR key valuation metrics and ratios. From Price to Earnings, Price to Sales and Price to Book to Price to Earnings Growth Ratio, Enterprise Value and EBITDA.
Key Statistics
Enterprise Value/Revenue	2.5x
Enterprise Value/EBITDA	15.1x
PEG Ratio	1.8x

Price to Earnings Ratio vs Peers

How does WEIR's PE Ratio compare to its peers?

WEIR PE Ratio vs Peers

The above table shows the PE ratio for WEIR vs its peers. Here we also display the market cap and forecasted growth for additional consideration.
Company	PE	Estimated Growth	Market Cap
Peer Average	25.5x
IMI IMI	16.1x	11.3%	UK£3.3b
ROR Rotork	30.1x	12.2%	UK£2.3b
SPX Spirax-Sarco Engineering	36.6x	7.3%	UK£8.6b
BOY Bodycote	19.2x	12.5%	UK£1.2b
WEIR Weir Group	25x	13.7%	UK£4.3b

Price-To-Earnings vs Peers: WEIR is good value based on its Price-To-Earnings Ratio (25x) compared to the peer average (25.5x).

Price to Earnings Ratio vs Industry

How does WEIR's PE Ratio compare vs other companies in the European Machinery Industry?

Price-To-Earnings vs Industry: WEIR is expensive based on its Price-To-Earnings Ratio (25x) compared to the UK Machinery industry average (17.1x)

Price to Earnings Ratio vs Fair Ratio

What is WEIR's PE Ratio compared to its Fair PE Ratio? This is the expected PE Ratio taking into account the company's forecast earnings growth, profit margins and other risk factors.

WEIR PE Ratio vs Fair Ratio.
Fair Ratio
Current PE Ratio	25x
Fair PE Ratio	28.2x

Price-To-Earnings vs Fair Ratio: WEIR is good value based on its Price-To-Earnings Ratio (25x) compared to the estimated Fair Price-To-Earnings Ratio (28.2x).

Share Price vs Fair Value

What is the Fair Price of WEIR when looking at its future cash flows? For this estimate we use a Discounted Cash Flow model.

Below Fair Value: WEIR (£16.61) is trading below our estimate of fair value (£20.64)

Significantly Below Fair Value: WEIR is trading below fair value, but not by a significant amount.

Analyst Price Targets

What is the analyst 12-month forecast and do we have any statistical confidence in the consensus price target?

Analyst Forecast: Target price is less than 20% higher than the current share price.

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Future Growth

How is Weir Group forecast to perform in the next 1 to 3 years based on estimates from 16 analysts?

Future Growth Score

3/6

Future Growth Score 3/6

Earnings vs Savings Rate
Earnings vs Market
High Growth Earnings
Revenue vs Market
High Growth Revenue
Future ROE

13.7%

Forecasted annual earnings growth

Earnings and Revenue Growth Forecasts

Analyst Future Growth Forecasts

Earnings vs Savings Rate: WEIR's forecast earnings growth (13.7% per year) is above the savings rate (0.9%).

Earnings vs Market: WEIR's earnings (13.7% per year) are forecast to grow faster than the UK market (9.4% per year).

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

Revenue vs Market: WEIR's revenue (5.9% per year) is forecast to grow faster than the UK market (3.9% per year).

High Growth Revenue: WEIR's revenue (5.9% per year) is forecast to grow slower than 20% per year.

Earnings per Share Growth Forecasts

Future Return on Equity

Future ROE: WEIR's Return on Equity is forecast to be low in 3 years time (16.4%).

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Past Performance

How has Weir Group performed over the past 5 years?

Past Performance Score

4/6

Past Performance Score 4/6

Quality Earnings
Growing Profit Margin
Earnings Trend
Accelerating Growth
Earnings vs Industry
High ROE

4.9%

Historical annual earnings growth

Earnings and Revenue History

Quality Earnings: WEIR has high quality earnings.

Growing Profit Margin: WEIR's current net profit margins (8.1%) are higher than last year (7.5%).

Past Earnings Growth Analysis

Earnings Trend: WEIR's earnings have grown by 4.9% per year over the past 5 years.

Accelerating Growth: WEIR's earnings growth over the past year (17.5%) exceeds its 5-year average (4.9% per year).

Earnings vs Industry: WEIR earnings growth over the past year (17.5%) underperformed the Machinery industry 54.3%.

Return on Equity

High ROE: WEIR's Return on Equity (10.4%) is considered low.

Discover strong past performing companies

Financial Health

How is Weir Group's financial position?

Financial Health Score

4/6

Financial Health Score 4/6

Short Term Liabilities
Long Term Liabilities
Debt Level
Reducing Debt
Debt Coverage
Interest Coverage

Financial Position Analysis

Short Term Liabilities: WEIR's short term assets (£1.7B) exceed its short term liabilities (£898.9M).

Long Term Liabilities: WEIR's short term assets (£1.7B) exceed its long term liabilities (£1.2B).

Debt to Equity History and Analysis

Debt Level: WEIR's net debt to equity ratio (50.8%) is considered high.

Reducing Debt: WEIR's debt to equity ratio has reduced from 85.2% to 79% over the past 5 years.

Debt Coverage: WEIR's debt is not well covered by operating cash flow (7.5%).

Interest Coverage: WEIR's interest payments on its debt are well covered by EBIT (7.3x coverage).

Balance Sheet

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Dividend

What is Weir Group current dividend yield, its reliability and sustainability?

Dividend Score

1/6

Dividend Score 1/6

Notable Dividend
High Dividend
Stable Dividend
Growing Dividend
Earnings Coverage
Cash Flow Coverage

1.63%

Current Dividend Yield

Upcoming Dividend Payment

Dividend Yield vs Market

Notable Dividend: WEIR's dividend (1.63%) isn’t notable compared to the bottom 25% of dividend payers in the UK market (1.83%).

High Dividend: WEIR's dividend (1.63%) is low compared to the top 25% of dividend payers in the UK market (5.11%).

Stability and Growth of Payments

Stable Dividend: WEIR's dividend payments have been volatile in the past 10 years.

Growing Dividend: WEIR's dividend payments have fallen over the past 10 years.

Earnings Payout to Shareholders

Earnings Coverage: With its reasonably low payout ratio (38.8%), WEIR's dividend payments are well covered by earnings.

Cash Payout to Shareholders

Cash Flow Coverage: With its high cash payout ratio (144.2%), WEIR's dividend payments are not well covered by cash flows.

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Management

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

5.5yrs

Average management tenure

CEO

Jon Stanton (55 yo)

5.83yrs

Tenure

UK£1,767,564

Compensation

Mr. Jonathan Stanton, also known as Jon, has been the Chief Executive Officer of The Weir Group PLC since October 1, 2016 and served as its Group Finance Director from April 19, 2010 to October 3, 2016. He...

CEO Compensation Analysis

Compensation vs Market: Jon's total compensation ($USD2.16M) is below average for companies of similar size in the UK market ($USD3.29M).

Compensation vs Earnings: Jon's compensation has increased by more than 20% in the past year.

Leadership Team

Experienced Management: WEIR's management team is seasoned and experienced (5.5 years average tenure).

Board Members

Experienced Board: WEIR's board of directors are considered experienced (5.4 years average tenure).

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.

Data	Last Updated (UTC time)
Company Analysis	2022/08/11 00:00
End of Day Share Price	2022/08/11 00:00
Earnings	2022/06/30
Annual Earnings	2021/12/31