Have Analysts Taken ICL (ICL)'s Valuation Into Account?

ICL may be undervalued with strong growth indicators, but the 5 analysts following the company give it an rating of hold. Their target prices range from $8.0 to $9.1 per share, for an average of $8.72. At today's price of $6.42, ICL is trading -26.43% away from its average target price, suggesting there is an analyst consensus of strong upside potential for the stock.

ICL Group Ltd, together with its subsidiaries, operates as a specialty minerals and chemicals company worldwide. It operates in four segments: Industrial Products, Potash, Phosphate Solutions, and Growing Solutions. Based in Tel Aviv, Israel, the large-cap Industrials company has 12,733 full time employees. ICL has offered a 13.9% dividend yield over the last 12 months.

ICL has a trailing twelve month P/E ratio of 3.8, compared to an average of 20.49 for the Industrials sector. Based on its EPS guidance of 0.72, the company has a forward P/E ratio of 8.9.

The average compound growth rate of the company's historical and projected earnings per share is 18.1%. On this basis, the company's PEG ratio is 0.21. However, this growth rate is probably not sustainable. In its place we will use the broader market's estimated 5-year EPS growth rate of 13.05%, which gives us a PEG ratio of 0.29. Even with this more conservative assumption on EPS growth, the PEG ratio suggests that ICL shares are underpriced.

Furthermore, the market is potentially undervaluing ICL in terms of its book value because its P/B ratio is 1.5. In comparison, the sector average P/B ratio is 3.78. The company's shares are currently -19.1% below their Graham number, indicating that its shares have a margin of safety.

2019-12-31 2020-12-31 2021-12-31 2022-12-31
Revenue (MM) $5,271 $5,043 $6,955 $10,015
Revenue Growth n/a -4.33% 37.91% 44.0%
Gross Margins 34.5% 29.6% 37.5% 50.2%
Gross Margins Growth n/a -14.2% 26.69% 33.87%
Operating Margins 14.1% 4.0% 17.1% 34.8%
Operating Margins Growth n/a -71.63% 327.5% 103.51%
Net Margins 9.01% 0.22% 11.26% 21.56%
Net Margins Growth n/a -97.56% 5018.18% 91.47%
Earnings Per Share $0.37 $0.01 $0.6 $1.67
EPS Growth n/a -97.3% 5900.0% 178.33%
Diluted Shares (MM) 1,281 1,280 1,287 1,289
Free Cash Flow (MM) $416 $178 $454 $1,278
FCF Growth n/a -57.21% 155.06% 181.5%
Capital Expenditures (MM) -$576 -$626 -$611 -$747
Net Debt / EBITDA 1.91 2.9 1.34 0.53
The above analysis is intended for educational purposes only and was performed on the basis of publicly available data. It is not to be construed as a recommendation to buy or sell any security. Any buy, sell, or other recommendations mentioned in the article are direct quotations of consensus recommendations from the analysts covering the stock, and do not represent the opinions of Market Inference or its writers. Past performance, accounting data, and inferences about market position and corporate valuation are not reliable indicators of future price movements. Market Inference does not provide financial advice. Investors should conduct their own review and analysis of any company of interest before making an investment decision.