Gränges (OM:GRNG) - Share price, News & Analysis

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

GRNG (SEK80.15) is trading below our estimate of [[fair value]] (SEK455.3)

GRNG fundamental analysis
Snowflake Score
Valuation	4/6
Future Growth	4/6
Past Performance	1/6
Financial Health	4/6
Dividends	2/6

GRNG Stock Overview

Gränges AB (publ) develops, produces, and distributes rolled aluminum products for thermal management systems, specialty packaging, and niche applications in Europe, Asia, and the Americas.

Rewards

Trading at 82.4% below our estimate of its fair value

Earnings are forecast to grow 23.89% per year

Risk Analysis

Debt is not well covered by operating cash flow

Dividend of 2.81% is not well covered by earnings

Large one-off items impacting financial results

Gränges Competitors

ProfilGruppen

OM:PROF B

kr1.2b

SSAB

OM:SSAB A

kr45.8b

BillerudKorsnäs

OM:BILL

kr24.7b

Nordic Paper Holding

OM:NPAPER

kr2.6b

Price History & Performance

Summary of all time highs, changes and price drops for Gränges
Historical stock prices
Current Share Price	kr80.15
52 Week High	kr123.50
52 Week Low	kr68.05
Beta	1.62
1 Month Change	-5.20%
3 Month Change	-14.19%
1 Year Change	-31.55%
3 Year Change	-25.58%
5 Year Change	-1.66%
Change since IPO	84.25%

Recent News & Updates

May 26

These 4 Measures Indicate That Gränges (STO:GRNG) Is Using Debt Extensively

Legendary fund manager Li Lu (who Charlie Munger backed) once said, 'The biggest investment risk is not the volatility...

Shareholder Returns

	GRNG	SE Metals and Mining	SE Market
7D	-5.3%	-4.9%	-1.3%
1Y	-31.6%	0.4%	-23.6%

Return vs Industry: GRNG underperformed the Swedish Metals and Mining industry which returned 0.4% over the past year.

Return vs Market: GRNG underperformed the Swedish Market which returned -23.6% over the past year.

Price Volatility

Is GRNG's price volatile compared to industry and market?
GRNG volatility
GRNG Average Weekly Movement	8.0%
Metals and Mining Industry Average Movement	7.7%
Market Average Movement	7.4%
10% most volatile stocks in SE Market	12.2%
10% least volatile stocks in SE Market	4.7%

Stable Share Price: GRNG is not significantly more volatile than the rest of Swedish stocks over the past 3 months, typically moving +/- 8% a week.

Volatility Over Time: GRNG's weekly volatility (8%) has been stable over the past year.

About the Company

Founded	Employees	CEO	Website
1896	2,600	Jorgen Rosengren	https://www.granges.com

Gränges AB (publ) develops, produces, and distributes rolled aluminum products for thermal management systems, specialty packaging, and niche applications in Europe, Asia, and the Americas. The company offers clad tubes and fins, unclad fins, and clad plates. It serves various markets, including automotive; heating, ventilation, and air conditioning; Speciality packaging; battery; and transformers, heat exchanger for industrial applications, and wind turbines.

Gränges Fundamentals Summary

How do Gränges's earnings and revenue compare to its market cap?
GRNG fundamental statistics
Market Cap	kr8.11b
Earnings (TTM)	kr617.00m
Revenue (TTM)	kr20.17b

13.8x

P/E Ratio

0.4x

P/S Ratio

Is GRNG overvalued?

See Fair Value and valuation analysis

Earnings & Revenue

Key profitability statistics from the latest earnings report
GRNG income statement (TTM)
Revenue	kr20.17b
Cost of Revenue	kr14.52b
Gross Profit	kr5.65b
Other Expenses	kr5.04b
Earnings	kr617.00m

Last Reported Earnings

Mar 31, 2022

Next Earnings Date

Jul 15, 2022

Earnings per share (EPS)	5.80
Gross Margin	28.03%
Net Profit Margin	3.06%
Debt/Equity Ratio	70.4%

How did GRNG perform over the long term?

See historical performance and comparison

Dividends

2.8%

Current Dividend Yield

39%

Payout Ratio

We’ve recently updated our valuation analysis.

Valuation

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

Valuation Score

4/6

Valuation Score 4/6

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

Key Valuation Metric

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

Other financial metrics that can be useful for relative valuation.

The above table shows the n/a ratio for GRNG. This is calculated by dividing GRNG's market cap by their current preferred multiple.
What is GRNG's n/a Ratio?
n/a Ratio	0x
n/a	n/a
Market Cap	kr8.11b

GRNG 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	0.6x
Enterprise Value/EBITDA	7.8x
PEG Ratio	0.6x

Price to Earnings Ratio vs Peers

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

GRNG PE Ratio vs Peers

The above table shows the PE ratio for GRNG vs its peers. Here we also display the market cap and forecasted growth for additional consideration.
Company	PE	Estimated Growth	Market Cap
Peer Average	8.6x
PROF B ProfilGruppen	8.7x	n/a	kr1.2b
SSAB A SSAB	2.5x	-55.9%	kr45.8b
BILL BillerudKorsnäs	12.4x	7.3%	kr24.7b
NPAPER Nordic Paper Holding	11.5x	7.3%	kr2.6b
GRNG Gränges	13.8x	23.9%	kr8.5b

Forward PE

Price-To-Earnings vs Peers: GRNG is expensive based on its Price-To-Earnings Ratio (13.8x) compared to the peer average (8.8x).

Price to Earnings Ratio vs Industry

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

Price-To-Earnings vs Industry: GRNG is expensive based on its Price-To-Earnings Ratio (13.8x) compared to the Swedish Metals and Mining industry average (13.1x)

Price to Earnings Ratio vs Fair Ratio

What is GRNG'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.

GRNG PE Ratio vs Fair Ratio.
Fair Ratio
Current PE Ratio	13.8x
Fair PE Ratio	17.9x

Price-To-Earnings vs Fair Ratio: GRNG is good value based on its Price-To-Earnings Ratio (13.8x) compared to the estimated Fair Price-To-Earnings Ratio (18x).

Share Price vs Fair Value

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

Below Fair Value: GRNG (SEK80.15) is trading below our estimate of fair value (SEK455.3)

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

Price to Earnings Growth Ratio

PEG Ratio: GRNG is good value based on its PEG Ratio (0.6x)

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Future Growth

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

Future Growth Score

4/6

Future Growth Score 4/6

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

23.9%

Forecasted annual earnings growth

Earnings and Revenue Growth Forecasts

Analyst Future Growth Forecasts

Earnings vs Savings Rate: GRNG's forecast earnings growth (23.9% per year) is above the savings rate (0.3%).

Earnings vs Market: GRNG's earnings (23.9% per year) are forecast to grow faster than the Swedish market (9.8% per year).

High Growth Earnings: GRNG's earnings are expected to grow significantly over the next 3 years.

Revenue vs Market: GRNG's revenue (8.9% per year) is forecast to grow faster than the Swedish market (5.6% per year).

High Growth Revenue: GRNG's revenue (8.9% per year) is forecast to grow slower than 20% per year.

Earnings per Share Growth Forecasts

Future Return on Equity

Future ROE: GRNG's Return on Equity is forecast to be low in 3 years time (14.5%).

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Past Performance

How has Gränges 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

-3.6%

Historical annual earnings growth

Earnings and Revenue History

Quality Earnings: GRNG has a large one-off loss of SEK199.0M impacting its March 31 2022 financial results.

Growing Profit Margin: GRNG's current net profit margins (3.1%) are lower than last year (3.9%).

Past Earnings Growth Analysis

Earnings Trend: GRNG's earnings have declined by 3.6% per year over the past 5 years.

Accelerating Growth: GRNG's earnings growth over the past year (31.6%) exceeds its 5-year average (-3.6% per year).

Earnings vs Industry: GRNG earnings growth over the past year (31.6%) underperformed the Metals and Mining industry 171.9%.

Return on Equity

High ROE: GRNG's Return on Equity (8.5%) is considered low.

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Financial Health

How is Gränges'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: GRNG's short term assets (SEK9.6B) exceed its short term liabilities (SEK7.2B).

Long Term Liabilities: GRNG's short term assets (SEK9.6B) exceed its long term liabilities (SEK3.6B).

Debt to Equity History and Analysis

Debt Level: GRNG's net debt to equity ratio (61.4%) is considered high.

Reducing Debt: GRNG's debt to equity ratio has reduced from 93% to 70.4% over the past 5 years.

Debt Coverage: GRNG's operating cash flow is negative, therefore debt is not well covered.

Interest Coverage: GRNG's interest payments on its debt are well covered by EBIT (13.8x coverage).

Balance Sheet

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Dividend

What is Gränges's current dividend yield, its reliability and sustainability?

Dividend Score

3/6

Dividend Score 3/6

Notable Dividend
High Dividend
Stable Dividend
Growing Dividend
Earnings Coverage
Future Dividend Coverage

2.81%

Current Dividend Yield

Dividend Yield vs Market

Notable Dividend: GRNG's dividend (2.81%) is higher than the bottom 25% of dividend payers in the Swedish market (1.67%).

High Dividend: GRNG's dividend (2.81%) is low compared to the top 25% of dividend payers in the Swedish market (5.41%).

Stability and Growth of Payments

Stable Dividend: GRNG has been paying a dividend for less than 10 years and during this time payments have been volatile.

Growing Dividend: GRNG's dividend payments have increased, but the company has only paid a dividend for 7 years.

Earnings Payout to Shareholders

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

Cash Payout to Shareholders

Cash Flow Coverage: GRNG is paying a dividend but the company has no free cash flows.

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Management

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

5.8yrs

Average management tenure

CEO

Jorgen Rosengren (54 yo)

0.67

Tenure

kr12,900,000

Compensation

Mr. Jorgen Rosengren serves as President & Chief Executive Officer at Gr nges AB (publ) since October 01, 2021 and serves as its Interim President of Gr nges Europe since November 18, 2021 until March 1, 2...

CEO Compensation Analysis

Compensation vs Market: Jorgen's total compensation ($USD1.28M) is above average for companies of similar size in the Swedish market ($USD790.01K).

Compensation vs Earnings: Insufficient data to compare Jorgen's compensation with company performance.

Leadership Team

Experienced Management: GRNG's management team is seasoned and experienced (5.8 years average tenure).

Board Members

Experienced Board: GRNG's board of directors are considered experienced (6.2 years average tenure).

Ownership

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

Insider Trading Volume

Insider Buying: GRNG 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	2022/06/27 00:00
End of Day Share Price	2022/06/27 00:00
Earnings	2022/03/31
Annual Earnings	2021/12/31