Commercial Banking company Mitsubishi UFJ Financial is taking Wall Street by surprise today, falling to $12.14 and marking a -3.1% change compared to the S&P 500, which moved 1.0%. MUFG is -6.07% below its average analyst target price of $12.93, which implies there is more upside for the stock. Over the last year, Mitsubishi UFJ Financial shares have outstripped the S&P 500 by 9.0%, with a price change of 33.3%.
Mitsubishi UFJ Financial Group, Inc. operates as the bank holding company, that engages in a range of financial businesses in Japan, the United States, Europe, Asia/Oceania, and internationally. The company is part of the financial services sector, alongside a staggering variety of banking, mortgage, insurance,and credit service companies. If there is one common denominator among all companies in the sector, it’s that they are all dedicated to maintaining and developing new systems for the storage and transfer of value and risk.
Mitsubishi UFJ Financial's trailing 12 month P/E ratio is 12.1, based on its trailing EPS of $1.0. The company has a forward P/E ratio of 11.8 according to its forward EPS of $1.03 -- which is an estimate of what its earnings will look like in the next quarter. As of the third quarter of 2024, the average Price to Earnings (P/E) ratio for US finance companies is 20.04, and the S&P 500 has an average of 29.3. The P/E ratio consists in the stock's share price divided by its earnings per share (EPS), representing how much investors are willing to spend for each dollar of the company's earnings. Earnings are the company's revenues minus the cost of goods sold, overhead, and taxes.
When we subtract capital expenditures from operating cash flows, we are left with the company's free cash flow, which for Mitsubishi UFJ Financial was $-1603989000000 as of its last annual report. Free cash flow represents the amount of money available for reinvestment in the business or for payments to equity investors in the form of a dividend. In MUFG's case the cash flow outlook is weak. It's average cash flow over the last 4 years has been $-495691500000.0 and they've been growing at an average rate of -13.8%.
Value investors often analyze stocks through the lens of its Price to Book (P/B) Ratio (its share price divided by its book value). The book value refers to the present value of the company if the company were to sell off all of its assets and pay all of its debts today - a number whose value may differ significantly depending on the accounting method. Mitsubishi ufj financial's P/B ratio of 0.01 indicates that the market value of the company is less than the value of its assets -- a potential indicator of an undervalued stock. The average P/B ratio of the Finance sector was 1.86 as of the third quarter of 2024.
Since it has a Very low P/E ratio, an exceptionally low P/B ratio., and negative cash flows with a downwards trend, Mitsubishi UFJ Financial is likely overvalued at today's prices. The company has mixed growth prospects because of a negative PEG ratio and decent net margins with a negative growth trend. We hope you enjoyed this overview of MUFG's fundamentals. Be sure to check the numbers for yourself, especially focusing on their trends over the last few years.
