Covestro Valuation

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

COVT.Y ($29.73) is trading below our estimate of [[fair value]] ($63.37)

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

Valuation Score

5/6

Valuation Score 5/6

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

Share Price vs Fair Value

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

Below Fair Value: COVT.Y ($29.73) is trading below our estimate of fair value ($63.37)

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

Key Valuation Metric

Which metric is best to use when looking at relative valuation for COVT.Y?

Key metric: As COVT.Y is unprofitable we use its Price-To-Sales Ratio for relative valuation analysis.

The above table shows the Price to Sales ratio for COVT.Y. This is calculated by dividing COVT.Y's market cap by their current revenue.
What is COVT.Y's PS Ratio?
PS Ratio	0.8x
Sales	€14.15b
Market Cap	€10.78b

COVT.Y 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	1x
Enterprise Value/EBITDA	18.7x
PEG Ratio	n/a

Price to Sales Ratio vs Peers

How does COVT.Y's PS Ratio compare to its peers?

The above table shows the PS ratio for COVT.Y vs its peers. Here we also display the market cap and forecasted growth for additional consideration.
Company	Forward PS	Estimated Growth	Market Cap
Peer Average	1.7x
EMN Eastman Chemical	1.3x	3.7%	US$12.0b
AXTA Axalta Coating Systems	1.7x	3.0%	US$8.7b
ESI Element Solutions	2.9x	5.6%	US$6.9b
CE Celanese	0.8x	2.3%	US$8.2b
COVT.Y Covestro	0.8x	4.3%	US$10.8b

Price-To-Sales vs Peers: COVT.Y is good value based on its Price-To-Sales Ratio (0.8x) compared to the peer average (1.7x).

Price to Sales Ratio vs Industry

How does COVT.Y's PS Ratio compare vs other companies in the US Chemicals Industry?

10 Companies	Price / Sales	Estimated Growth	Market Cap
TSE Trinseo	0.04x	5.0%	US$122.49m
ALTO Alto Ingredients	0.1x	3.1%	US$108.84m
BON Bon Natural Life	0.2x	n/a	US$6.27m
ABLT American Biltrite	0.02x	n/a	US$2.91m

10 Companies		Estimated Growth	Market Cap

No more companies

Price-To-Sales vs Industry: COVT.Y is good value based on its Price-To-Sales Ratio (0.8x) compared to the US Chemicals industry average (1.4x).

Price to Sales Ratio vs Fair Ratio

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

COVT.Y PS Ratio vs Fair Ratio.
Fair Ratio
Current PS Ratio	0.8x
Fair PS Ratio	1x

Price-To-Sales vs Fair Ratio: COVT.Y is good value based on its Price-To-Sales Ratio (0.8x) compared to the estimated Fair Price-To-Sales Ratio (1x).

Analyst Price Targets

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

Analyst Forecast: Insufficient data to show price forecast.

Discover undervalued companies

Allied Gold

CA$1.1b

Explores for and produces mineral deposits in Africa.

AAUC.F

CA$2.47

16.0%

-18.0%

Trinseo

US$122.5m

Operates as a specialty material solutions provider in the United States, Europe, the Asia-Pacific, and internationally.

TSE

US$3.55

2.6%

-45.6%

CMOC Group

HK$159.9b

Engages in the mining, beneficiation, smelting, and refining of base and rare metals.

CMCL.F

HK$0.77

-2.2%

29.7%