Hammond Power Solutions Inc T.HPS.A

Hammond Power Revenue, EPS, Share price estimate 2023-25

[Kiln]

 

                       2023E     2024E   2025E 

 

Revenues *   $725KK  $825KK  $925KK

Net margin**     8%      8%           8%

Net earnings   $58KK    $66KK    $74KK

Shares outstanding 12 million

EPS                $4.83      $5.50       $6.16

 

The company forecasts a $250 increase in revenue by adding new equipment to existing plants and building new plants.  Price increases have not been factored into the revenue assumptions.  

 

PE on 2025 earnings of 12X, suggests a stock price of $73.92 in 24 months, a 37% gain plus dividends.  This assumes margins and tax rate stay constant.  

 

* $250 million expansion plan in process.  Assume $100 million in 2023 & $200 million in 2024 as new equipment and plants come on line.  

** In line with trailing 4 quarter average, this could improve with operating leverage from higher revenues

 

[Catscratch]

I'm in the same ball park on revenue numbers but think your earning margin is low.  Trailing 4 quarters earnings margin is 9.24%.  This includes some added non-recurring costs to grow the business which may continue for the short term.  Additionally margins should improve with further growth going forward.  Hammond should be able to increase prices faster than costs to