Valuation Scorecard: Stock Rating C-Neutral (6/24/24)-Grupo Simec SA De C.V. (SIM).

Grupo Simec SA de C.V.’s common shares will need to reach $52 to achieve average annual stock market performance of 9.0% over the next 6 years. Grupo Simec SA de C.V.’s stock price will need to reach $61 by 2029 to achieve upper quartile performance. What is the market’s view of Grupo Simec SA de C.V.’s future operating performance as reflected in the current price of $31?

Executive Summary

• Price Target Research identifies Grupo Simec SA de C.V. as having: high expected growth, high financial strength, very high profitability, and high stability.
• Average valuation, below market shareholder returns. Current valuation levels are average relative to the Grupo Simec SA de C.V. Peer Group. Recent market returns have underperformed the Grupo Simec SA de C.V. Peer Group. Total shareholder returns expected to significantly beat the overall equity market. Based on current investor expectations, Grupo Simec SA de C.V. shares should reach a level of $85 by 2029 — an 18.4% per year total shareholder return. A 2029 stock price of $52 would reflect median performance and a price of $61 would be required to reach upper quartile performance.
• Grupo Simec SA de C.V.’s achieved growth is slightly below average. Historical growth has been below average relative to the Grupo Simec SA de C.V. Peer Group and forecasted growth is relatively very high. Asset Growth, and Equity Growth have been superior. Revenue Growth has lagged. Grupo Simec SA de C.V.’s historical income statement growth has been lower than balance sheet growth. Revenue growth has fallen short of asset growth; earnings growth has fallen short of equity growth driving erosion in return on equity.
• Return on Equity, Pretax Margin, and Pretax ROA are group leading. Asset Turnover is group lagging. The company has very low cash and will have to work to generate attractive investments and improve valuation.
• Grupo Simec SA de C.V.’s risk profile is unfavorable. Overall variability has been above average with above average revenue variability, only average E.P.S. variability, and very low stock price volatility. Financial Strength is relatively very high and earnings’ expectations are unavailable. The debt/capital ratio has declined.

Click to read the full Scorecard report