Valuation Scorecard: Stock Rating F-Lowest (3/25/24)-MSA Safety Inc (MSA).


Over the next 6 years, MSA Safety shares will need to reach $317 to achieve average annual stock market performance of 9.0%. MSA Safety’s stock price will need to reach $373 by 2029 to achieve upper quartile performance. What is the market’s view of MSA Safety’s future operating performance as reflected in the current price of $189?

Executive Summary

  • Key MSA Safety characteristics: above average financial strength, stability, average profitability, and below average expected growth. A big positive influence on MSA Safety’s valuation is its superior Profitability.
  • Very high valuation, above market shareholder returns. Current valuation levels are very high relative to the MSA Safety Peer Group. Recent market returns have outperformed the MSA Safety Peer Group. Total shareholder returns expected to significantly lag the overall equity market. Based on current investor expectations, MSA Safety shares should reach a level of $109 by 2029 — an -7.3% per year total shareholder return. A 2029 stock price of $317 would reflect median performance and a price of $373 would be required to reach upper quartile performance.
  • MSA Safety’s historical growth is modestly above average. Historical growth has been high relative to the MSA Safety Peer Group and forecasted growth is relatively below average. Revenue Growth has been superior. This factor has buoyed market perceptions of MSA Safety. MSA Safety’s historical income statement growth has been higher than growth in the balance sheet. Revenue growth has exceeded asset growth; earnings growth has exceeded equity growth resulting in an improving return on equity.
  • Profitability has been MSA Safety’s biggest valuation strength. Pretax ROA is group leading. This factor has strengthened market perceptions of MSA Safety. The company has high excess cash and will have to work to reinvest at attractive returns to support profitability and valuation.
  • MSA Safety’s risk profile is favorable. Overall variability has been very low with very low revenue variability, above average E.P.S. variability, and relatively low stock price volatility. Financial Strength is relatively high and earnings’ expectations are below average. The debt/capital ratio has risen.

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