Alembic Global Sticks to Its Buy Rating for Trinseo (TSE)
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According to TipRanks, Ahmed is a 4-star analyst with an average return of 3.0% and a 45.25% success rate. Ahmed covers the Basic Materials sector, focusing on stocks such as Celanese, TRONOX, and Air Products and Chemicals.
The word on The Street in general, suggests a Moderate Buy analyst consensus rating for Trinseo with a $7.00 average price target.
TSE market cap is currently $151.5M and has a P/E ratio of -0.43.
Based on the recent corporate insider activity of 58 insiders, corporate insider sentiment is positive on the stock. This means that over the past quarter there has been an increase of insiders buying their shares of TSE in relation to earlier this year. Most recently, in March 2025, Johanna Frisch, the VP & Treasurer of TSE bought 3,800.00 shares for a total of $15,708.00.
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Does This Valuation Of Richelieu Hardware Ltd. (TSE:RCH) Imply Investors Are Overpaying?
Key Insights The projected fair value for Richelieu Hardware is CA$26.75 based on 2 Stage Free Cash Flow to Equity Richelieu Hardware is estimated to be 31% overvalued based on current share price of CA$34.93 Today we'll do a simple run through of a valuation method used to estimate the attractiveness of Richelieu Hardware Ltd. (TSE:RCH) as an investment opportunity by projecting its future cash flows and then discounting them to today's value. Our analysis will employ the Discounted Cash Flow (DCF) model. Believe it or not, it's not too difficult to follow, as you'll see from our example! Remember though, that there are many ways to estimate a company's value, and a DCF is just one method. If you still have some burning questions about this type of valuation, take a look at the Simply Wall St analysis model. AI is about to change healthcare. These 20 stocks are working on everything from early diagnostics to drug discovery. The best part - they are all under $10bn in marketcap - there is still time to get in early. The Method We use what is known as a 2-stage model, which simply means we have two different periods of growth rates for the company's cash flows. Generally the first stage is higher growth, and the second stage is a lower growth phase. To start off with, we need to estimate the next ten years of cash flows. Where possible we use analyst estimates, but when these aren't available we extrapolate the previous free cash flow (FCF) from the last estimate or reported value. We assume companies with shrinking free cash flow will slow their rate of shrinkage, and that companies with growing free cash flow will see their growth rate slow, over this period. We do this to reflect that growth tends to slow more in the early years than it does in later years. A DCF is all about the idea that a dollar in the future is less valuable than a dollar today, and so the sum of these future cash flows is then discounted to today's value: 2026 2027 2028 2029 2030 2031 2032 2033 2034 2035 Levered FCF (CA$, Millions) CA$85.9m CA$82.8m CA$81.3m CA$80.9m CA$81.3m CA$82.1m CA$83.3m CA$84.8m CA$86.5m CA$88.3m Growth Rate Estimate Source Analyst x1 Est @ -3.60% Est @ -1.77% Est @ -0.49% Est @ 0.40% Est @ 1.03% Est @ 1.47% Est @ 1.77% Est @ 1.99% Est @ 2.14% Present Value (CA$, Millions) Discounted @ 7.4% CA$80.0 CA$71.8 CA$65.7 CA$60.8 CA$56.9 CA$53.5 CA$50.5 CA$47.9 CA$45.5 CA$43.3 ("Est" = FCF growth rate estimated by Simply Wall St)Present Value of 10-year Cash Flow (PVCF) = CA$576m The second stage is also known as Terminal Value, this is the business's cash flow after the first stage. The Gordon Growth formula is used to calculate Terminal Value at a future annual growth rate equal to the 5-year average of the 10-year government bond yield of 2.5%. We discount the terminal cash flows to today's value at a cost of equity of 7.4%. Terminal Value (TV)= FCF2035 × (1 + g) ÷ (r – g) = CA$88m× (1 + 2.5%) ÷ (7.4%– 2.5%) = CA$1.8b Present Value of Terminal Value (PVTV)= TV / (1 + r)10= CA$1.8b÷ ( 1 + 7.4%)10= CA$904m The total value, or equity value, is then the sum of the present value of the future cash flows, which in this case is CA$1.5b. The last step is to then divide the equity value by the number of shares outstanding. Compared to the current share price of CA$34.9, the company appears potentially overvalued at the time of writing. Valuations are imprecise instruments though, rather like a telescope - move a few degrees and end up in a different galaxy. Do keep this in mind. Important Assumptions We would point out that the most important inputs to a discounted cash flow are the discount rate and of course the actual cash flows. Part of investing is coming up with your own evaluation of a company's future performance, so try the calculation yourself and check your own assumptions. The DCF also does not consider the possible cyclicality of an industry, or a company's future capital requirements, so it does not give a full picture of a company's potential performance. Given that we are looking at Richelieu Hardware as potential shareholders, the cost of equity is used as the discount rate, rather than the cost of capital (or weighted average cost of capital, WACC) which accounts for debt. In this calculation we've used 7.4%, which is based on a levered beta of 1.133. Beta is a measure of a stock's volatility, compared to the market as a whole. We get our beta from the industry average beta of globally comparable companies, with an imposed limit between 0.8 and 2.0, which is a reasonable range for a stable business. See our latest analysis for Richelieu Hardware SWOT Analysis for Richelieu Hardware Strength Debt is not viewed as a risk. Dividends are covered by earnings and cash flows. Weakness Earnings declined over the past year. Dividend is low compared to the top 25% of dividend payers in the Trade Distributors market. Expensive based on P/E ratio and estimated fair value. Opportunity Annual earnings are forecast to grow for the next 2 years. Threat No apparent threats visible for RCH. Looking Ahead: Although the valuation of a company is important, it ideally won't be the sole piece of analysis you scrutinize for a company. It's not possible to obtain a foolproof valuation with a DCF model. Rather it should be seen as a guide to "what assumptions need to be true for this stock to be under/overvalued?" For instance, if the terminal value growth rate is adjusted slightly, it can dramatically alter the overall result. Can we work out why the company is trading at a premium to intrinsic value? For Richelieu Hardware, we've put together three pertinent items you should explore: Financial Health: Does RCH have a healthy balance sheet? Take a look at our free balance sheet analysis with six simple checks on key factors like leverage and risk. Future Earnings: How does RCH's growth rate compare to its peers and the wider market? Dig deeper into the analyst consensus number for the upcoming years by interacting with our free analyst growth expectation chart. Other High Quality Alternatives: Do you like a good all-rounder? Explore our interactive list of high quality stocks to get an idea of what else is out there you may be missing! PS. The Simply Wall St app conducts a discounted cash flow valuation for every stock on the TSX every day. If you want to find the calculation for other stocks just search here. Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned. Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
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Freehold Royalties (TSE:FRU) Is Paying Out A Dividend Of CA$0.09
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