Ferrexpo (LSE:FXPO) - Share price, News & Analysis

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

FXPO (£1.19) is trading below our estimate of [[fair value]] (£6.19)

FXPO fundamental analysis
Snowflake Score
Valuation	5/6
Future Growth	2/6
Past Performance	1/6
Financial Health	6/6
Dividends	5/6

FXPO Stock Overview

Ferrexpo plc, together with its subsidiaries, mines for, develops, processes, produces, markets, exports, and sells iron ore pellets to the metallurgical industry.

Rewards

Trading at 80.8% below our estimate of its fair value

Earnings are forecast to grow 9.21% per year

Trading at good value vs. peer average Price-To-Earnings ratio

Trading at good value vs. industry average Price-To-Earnings ratio

Trading below our calculated fair Price-To-Earnings ratio

Risk Analysis

Unstable dividend track record

Volatile share price over the past 3 months

Large one-off items impacting financial results

Profit margins (13.9%) are lower than last year (46%)

Ferrexpo Competitors

Hill & Smith Holdings

LSE:HILS

UK£731.7m

Anglo Pacific Group

LSE:APF

UK£399.6m

Novolipetsk Steel

LSE:NLMK

US$4.1b

Castings

LSE:CGS

UK£125.0m

Price History & Performance

Summary of all time highs, changes and price drops for Ferrexpo
Historical stock prices
Current Share Price	UK£1.19
52 Week High	UK£3.31
52 Week Low	UK£1.06
Beta	1.34
1 Month Change	-20.75%
3 Month Change	-9.73%
1 Year Change	-63.69%
3 Year Change	-23.53%
5 Year Change	-60.28%
Change since IPO	-21.06%

Shareholder Returns

	FXPO	GB Metals and Mining	GB Market
7D	-11.9%	-0.2%	-3.5%
1Y	-63.7%	-6.8%	-14.9%

Return vs Industry: FXPO underperformed the UK Metals and Mining industry which returned -6.8% over the past year.

Return vs Market: FXPO underperformed the UK Market which returned -14.9% over the past year.

Price Volatility

Is FXPO's price volatile compared to industry and market?
FXPO volatility
FXPO Average Weekly Movement	10.4%
Metals and Mining Industry Average Movement	7.9%
Market Average Movement	5.3%
10% most volatile stocks in GB Market	10.7%
10% least volatile stocks in GB Market	2.7%

Stable Share Price: FXPO is more volatile than 75% of UK stocks over the past 3 months, typically moving +/- 10% a week.

Volatility Over Time: FXPO's weekly volatility (10%) has been stable over the past year, but is still higher than 75% of UK stocks.

About the Company

Founded	Employees	CEO	Website
2005	10,000	Jim North	https://www.ferrexpo.com

Ferrexpo plc, together with its subsidiaries, mines for, develops, processes, produces, markets, exports, and sells iron ore pellets to the metallurgical industry. It operates two mines and a processing plant near Kremenchug in Ukraine; a port in Odessa; a fleet of vessels operating on the Rhine and Danube waterways; and an ocean-going vessel, which provides top-off services. The company also offers finance, management, procurement, transportation, marketing, shipping, barging, and port services.

Ferrexpo Fundamentals Summary

How do Ferrexpo's earnings and revenue compare to its market cap?
FXPO fundamental statistics
Market Cap	UK£720.95m
Earnings (TTM)	UK£264.55m
Revenue (TTM)	UK£1.91b

2.6x

P/E Ratio

0.4x

P/S Ratio

Is FXPO overvalued?

See Fair Value and valuation analysis

Earnings & Revenue

Key profitability statistics from the latest earnings report
FXPO income statement (TTM)
Revenue	US$2.10b
Cost of Revenue	US$812.00m
Gross Profit	US$1.29b
Other Expenses	US$997.81m
Earnings	US$291.64m

Last Reported Earnings

Jun 30, 2022

Next Earnings Date

n/a

Earnings per share (EPS)	0.50
Gross Margin	61.36%
Net Profit Margin	13.88%
Debt/Equity Ratio	0%

How did FXPO perform over the long term?

See historical performance and comparison

Dividends

15.1%

Current Dividend Yield

40%

Payout Ratio

We’ve recently updated our valuation analysis.

Valuation

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

Valuation Score

5/6

Valuation Score 5/6

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 FXPO?

Other financial metrics that can be useful for relative valuation.

The above table shows the n/a ratio for FXPO. This is calculated by dividing FXPO's market cap by their current preferred multiple.
What is FXPO's n/a Ratio?
n/a Ratio	0x
n/a	n/a
Market Cap	US$794.77m

FXPO 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	0.3x
Enterprise Value/EBITDA	0.9x
PEG Ratio	0.3x

Price to Earnings Ratio vs Peers

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

FXPO PE Ratio vs Peers

The above table shows the PE ratio for FXPO vs its peers. Here we also display the market cap and forecasted growth for additional consideration.
Company	PE	Estimated Growth	Market Cap
Peer Average	8.4x
HILS Hill & Smith Holdings	14.9x	7.7%	UK£731.7m
APF Anglo Pacific Group	3.5x	-59.5%	UK£399.6m
NLMK Novolipetsk Steel	0.8x	n/a	US$4.1b
CGS Castings	14.6x	12.7%	UK£125.0m
FXPO Ferrexpo	2.7x	9.2%	UK£720.9m

Price-To-Earnings vs Peers: FXPO is good value based on its Price-To-Earnings Ratio (2.6x) compared to the peer average (8.4x).

Price to Earnings Ratio vs Industry

How does FXPO's PE Ratio compare vs other companies in the GB Metals and Mining Industry?

Price-To-Earnings vs Industry: FXPO is good value based on its Price-To-Earnings Ratio (2.6x) compared to the UK Metals and Mining industry average (4.8x)

Price to Earnings Ratio vs Fair Ratio

What is FXPO'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.

FXPO PE Ratio vs Fair Ratio.
Fair Ratio
Current PE Ratio	2.6x
Fair PE Ratio	12.2x

Price-To-Earnings vs Fair Ratio: FXPO is good value based on its Price-To-Earnings Ratio (2.6x) compared to the estimated Fair Price-To-Earnings Ratio (12.2x).

Share Price vs Fair Value

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

Below Fair Value: FXPO (£1.19) is trading below our estimate of fair value (£6.19)

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

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 more than 20% higher than the current share price, but analysts are not within a statistically confident range of agreement.

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Future Growth

How is Ferrexpo forecast to perform in the next 1 to 3 years based on estimates from 5 analysts?

Future Growth Score

2/6

Future Growth Score 2/6

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

9.2%

Forecasted annual earnings growth

Earnings and Revenue Growth Forecasts

Analyst Future Growth Forecasts

Earnings vs Savings Rate: FXPO's forecast earnings growth (9.2% per year) is above the savings rate (0.9%).

Earnings vs Market: FXPO's earnings (9.2% per year) are forecast to grow faster than the UK market (8.9% per year).

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

Revenue vs Market: FXPO's revenue (2.3% per year) is forecast to grow slower than the UK market (4.5% per year).

High Growth Revenue: FXPO's revenue (2.3% per year) is forecast to grow slower than 20% per year.

Earnings per Share Growth Forecasts

Future Return on Equity

Future ROE: FXPO's Return on Equity is forecast to be low in 3 years time (14%).

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Past Performance

How has Ferrexpo performed over the past 5 years?

Past Performance Score

1/6

Past Performance Score 1/6

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

18.4%

Historical annual earnings growth

Earnings and Revenue History

Quality Earnings: FXPO has a large one-off loss of $254.5M impacting its June 30 2022 financial results.

Growing Profit Margin: FXPO's current net profit margins (13.9%) are lower than last year (46%).

Past Earnings Growth Analysis

Earnings Trend: FXPO's earnings have grown by 18.4% per year over the past 5 years.

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

Earnings vs Industry: FXPO had negative earnings growth (-72.1%) over the past year, making it difficult to compare to the Metals and Mining industry average (-7.4%).

Return on Equity

High ROE: FXPO's Return on Equity (17.9%) is considered low.

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Financial Health

How is Ferrexpo's financial position?

Financial Health Score

6/6

Financial Health Score 6/6

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

Financial Position Analysis

Short Term Liabilities: FXPO's short term assets ($734.4M) exceed its short term liabilities ($174.0M).

Long Term Liabilities: FXPO's short term assets ($734.4M) exceed its long term liabilities ($18.8M).

Debt to Equity History and Analysis

Debt Level: FXPO is debt free.

Reducing Debt: FXPO has no debt compared to 5 years ago when its debt to equity ratio was 105.8%.

Debt Coverage: FXPO has no debt, therefore it does not need to be covered by operating cash flow.

Interest Coverage: FXPO has no debt, therefore coverage of interest payments is not a concern.

Balance Sheet

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Dividend

What is Ferrexpo current dividend yield, its reliability and sustainability?

Dividend Score

5/6

Dividend Score 5/6

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

15.12%

Current Dividend Yield

Dividend Yield vs Market

Ferrexpo Dividend Yield vs Market

How does Ferrexpo dividend yield compare to the market?
Segment	Dividend Yield
Company (Ferrexpo)	15.1%
Market Bottom 25% (GB)	2.1%
Market Top 25% (GB)	6.1%
Industry Average (Metals and Mining)	10.5%
Analyst forecast in 3 Years (Ferrexpo)	17.8%

Notable Dividend: FXPO's dividend (15.12%) is higher than the bottom 25% of dividend payers in the UK market (2.12%).

High Dividend: FXPO's dividend (15.12%) is in the top 25% of dividend payers in the UK market (6.08%)

Stability and Growth of Payments

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

Growing Dividend: FXPO's dividend payments have increased over the past 10 years.

Earnings Payout to Shareholders

Earnings Coverage: With its reasonably low payout ratio (39.9%), FXPO's dividend payments are well covered by earnings.

Cash Payout to Shareholders

Cash Flow Coverage: With its reasonably low cash payout ratio (33.7%), FXPO's dividend payments are well covered by cash flows.

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Management

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

7.8yrs

Average management tenure

CEO

Jim North

2.17yrs

Tenure

US$2,473,464

Compensation

Mr. James North, also known as Jim, serves as Executive Director at Ferrexpo Plc since July 5, 2020. He serves as the Group Chief Operating Officer of Ferrexpo Plc since November 1, 2014 and serves as its...

CEO Compensation Analysis

Jim North's Compensation vs Ferrexpo Earnings

How has Jim North's remuneration changed compared to Ferrexpo's earnings?
Date	Total Comp.	Salary	Company Earnings
Jun 30 2022	n/a	n/a	US$292m
Mar 31 2022	n/a	n/a	US$581m
Dec 31 2021	US$2m	US$959k	US$871m
Sep 30 2021	n/a	n/a	US$959m
Jun 30 2021	n/a	n/a	US$1b
Mar 31 2021	n/a	n/a	US$841m
Dec 31 2020	US$2m	US$567k	US$635m

Compensation vs Market: Jim's total compensation ($USD2.47M) is above average for companies of similar size in the UK market ($USD1.39M).

Compensation vs Earnings: Jim's compensation has increased by more than 20% whilst company earnings have fallen more than 20% in the past year.

Leadership Team

Experienced Management: FXPO's management team is seasoned and experienced (7.8 years average tenure).

Board Members

Experienced Board: FXPO's board of directors are considered experienced (3.2 years average tenure).

Ownership

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

Insider Trading Volume

Insider Buying: FXPO insiders have bought more shares than they have sold in the past 3 months.

Recent Insider Transactions

LSE:FXPO Recent Insider Transactions by Companies or Individuals
Date	Value	Name	Entity	Shares	Max Price
05 Jul 22	BuyUK£14,587	James North	Individual	11,178	UK£1.31
05 Jul 22	BuyUK£3,828	Greg Nortje	Individual	2,933	UK£1.31
28 Jun 22	BuyUK£28,792	James North	Individual	20,007	UK£1.44
28 Jun 22	BuyUK£7,552	Greg Nortje	Individual	5,248	UK£1.44
28 Jan 22	BuyUK£10,809	James North	Individual	4,355	UK£2.48
28 Jan 22	BuyUK£3,040	Greg Nortje	Individual	1,225	UK£2.48

Ownership Breakdown

What is the ownership structure of FXPO?
Owner Type	Number of Shares	Ownership Percentage
Public Companies	0	0%
Private Companies	338,563	0.06%
State or Government	1,944,958	0.3%
Employee Share Scheme	1,958,527	0.3%
General Public	17,481,768	3.0%
Institutions	268,861,227	45.7%
Individual Insiders	297,461,729	50.6%

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

Top Shareholders

Top 25 shareholders own 85.57% of the company

Ownership	Name	Shares	Current Value	Change %	Portfolio %
50.35%	Kostyantin Zhevago	296,077,944	$351.7m	0%	no data
6%	BlackRock, Inc.	35,301,072	$41.9m	90.63%	no data
5.78%	Schroder Investment Management Limited	34,008,362	$40.4m	5.84%	0.04%
2.89%	Acadian Asset Management LLC	16,984,376	$20.2m	4.41%	0.09%
2.18%	The Vanguard Group, Inc.	12,818,524	$15.2m	-3.98%	no data
1.81%	Grantham Mayo Van Otterloo & Co. LLC	10,658,228	$12.7m	-1.22%	0.05%
1.53%	Dimensional Fund Advisors LP	9,025,995	$10.7m	-3.98%	no data
1.48%	Norges Bank Investment Management	8,703,220	$10.3m	35.84%	no data
1.42%	BNY Mellon Asset Management	8,378,719	$10.0m	3.22%	no data
1.38%	HSBC Global Asset Management (UK) Limited	8,112,676	$9.6m	62.15%	0.01%
1.25%	Vr Advisory Services Ltd.	7,357,842	$8.7m	0%	3.71%
1.13%	BNP Paribas, Private & Investment Banking Investments	6,619,391	$7.9m	290.48%	0.06%
1.08%	WisdomTree Asset Management, Inc.	6,329,257	$7.5m	2.11%	0.07%
0.88%	LLB Asset Management AG	5,186,000	$6.2m	11.01%	0.34%
0.85%	Legal & General Investment Management Limited	5,014,385	$6.0m	0.97%	no data
0.82%	Mirae Asset Global Investments Co., Ltd	4,850,566	$5.8m	0%	0.01%
0.74%	Quantex AG	4,365,272	$5.2m	0%	0.71%
0.71%	SEI Investments Company	4,179,299	$5.0m	-2.06%	0.01%
0.55%	UBS Asset Management	3,241,711	$3.9m	-3.8%	no data
0.53%	Barclays Bank PLC, Securities Investments	3,091,223	$3.7m	93.75%	0.01%
0.49%	azValor Asset Management SGIIC, S.A.U.	2,891,195	$3.4m	0%	0.23%
0.49%	State Street Global Advisors, Inc.	2,890,647	$3.4m	36.51%	no data
0.41%	AXA Investment Managers S.A.	2,409,353	$2.9m	0%	0.01%
0.41%	LSV Asset Management	2,388,236	$2.8m	-3.61%	0.01%
0.39%	M&G Investment Management Limited	2,295,617	$2.7m	-89.96%	0.01%

Ticker	Exchange	Primary Security	Security Type	Country	Currency	Listed on
FXPO	LSE (London Stock Exchange)	Yes	Ordinary Shares	GB	GBP	Jun 2007
FEX	DB (Deutsche Boerse AG)	Yes	Ordinary Shares	DE	EUR	Jun 2007
FEEX.F	OTCPK (Pink Sheets LLC)	Yes	Ordinary Shares	US	USD	Jun 2007
FXPOL	BATS-CHIXE (BATS 'Chi-X Europe')	Yes	Ordinary Shares	GB	GBP	Jun 2007
FEEX.Y	OTCPK (Pink Sheets LLC)		UNPSPON ADR EA REPR 4 ORD GBP0.00	US	USD	Jun 2013

Data	Last Updated (UTC time)
Company Analysis	2022/09/29 00:00
End of Day Share Price	2022/09/29 00:00
Earnings	2022/06/30
Annual Earnings	2021/12/31