At the current price of $156, what are market expectations regarding Moog’s future operating performance? Over the next 6 years, Moog shares will need to reach $262 to achieve average annual stock market performance of 9.0%. To achieve Upper quartile performance, Moog’s stock price will need to reach $309 by 2029.
Executive Summary
- Price Target Research identifies Moog as having: below average expected growth, below average financial strength, low profitability, and low stability.
- Average valuation, leading shareholder returns. Current valuation levels are average relative to the Moog Peer Group. Recent market returns have significantly outperformed the Moog Peer Group. Total shareholder returns expected to significantly lag the overall equity market. Based on current investor expectations, Moog shares should reach a level of $167 by 2029 — an 1.9% per year total shareholder return. A 2029 stock price of $262 would reflect median performance and a price of $309 would be required to reach upper quartile performance.
- Moog’s historical growth is modestly above average. Historical growth has been high relative to the Moog Peer Group and forecasted growth is relatively below average. EPS Growth has been superior. This factor has buoyed market perceptions of Moog. Moog’s historical income statement growth and balance sheet growth have diverged. Revenue growth has paralleled asset growth; earnings growth has exceeded equity growth resulting in an improving return on equity.
- Profitability is only average. The company has normal cash needs.
- Moog’s risk profile is favorable. Overall variability has been very low with very low revenue variability, very high E.P.S. variability, and above average stock price volatility. Financial Strength is below average and earnings’ expectations are only average. The debt/capital ratio has declined.
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