Graco Inc Intrinsic Value – GRACO INC Reports 5.0% YOY Revenue Increase and 2.9% YOY Net Income Increase for FY2022 Q4

Earnings Overview

On January 30 2023, GRACO INC ($NYSE:GGG) reported its financial results for the fourth quarter of FY2022, noting a 5.0% year-over-year increase in total revenue to USD 126.2 million and a 2.9% rise in net income to USD 555.0 million for the period ending December 31 2022.

Transcripts Simplified

Graco reported record fourth quarter sales of $555 million, an increase of 3%. Net earnings for the quarter were $126 million or $0.74 per diluted share, an increase of 7%. Currency translation rates decreased sales and net earnings by $23 million and $12 million respectively. Gross margin rate decreased 2 percentage points in the quarter. Operating expenses decreased $10 million or 7%. Other expenses decreased $15 million in the quarter.

Adjusted tax rate for the quarter was 19%. Cash provided by operating activities were $377 million for the year, a decrease of $80 million from last year. Revenue outlook for 2023 is low single-digit growth on an organic constant currency basis. Currency translation rates are expected to increase sales and earnings by 1 percentage point in 2023. Unallocated corporate expenses are projected to increase and fall within the range of $31 million to $34 million.

About the Company

Income Snapshot

Below shows the total revenue, net income and net margin for Graco Inc. More…

Cash Flow Snapshot

Below shows the cash from operations, investing and financing for Graco Inc. More…

Balance Sheet Snapshot

Below shows the total assets, liabilities and book value per share for Graco Inc. More…

Key Ratios Snapshot

Some of the financial key ratios for Graco Inc are shown below. More…

Share Price

On Monday, GRACO INC reported its financial results for the fourth quarter of fiscal year 2022. Despite these positive numbers, the stock opened at $67.1 and then fell to close at $66.6, 1.0% lower than the previous closing price of $67.2. The company credited the impressive revenue performance to increased demand in the European market and higher sales of chemicals and equipment in the North American market. Furthermore, GRACO INC attributed the increase in net income to effective management of expenses, as well as efficiency in cost reduction and operating margin improvement initiatives. Going forward, GRACO INC is continuing its strategy of expanding into new markets while also investing in research and development to remain competitive within its industry.

Additionally, the company is focusing on capital expenditures and acquisitions to further drive revenue growth. This financial performance shows that the company is on track to achieve its long-term goals and deliver value for its shareholders. Live Quote…

Analysis – Graco Inc Intrinsic Value

At GoodWhale, we have conducted a comprehensive analysis on the fundamentals of GRACO INC to determine the intrinsic value of its shares. Our proprietary Valuation Line has suggested that the intrinsic value of GRACO INC’s shares is around $75.9. Currently, GRACO INC’s stock is being traded at $66.6, which is significantly lower than the intrinsic value and is considered to be a fair price that is 12.3% undervalued. This presents an opportunity for investors who are looking to gain good returns in the long run. More…

Peers

The company’s products include pumps, valves, proportioners, injectors, and DispenseMate systems. Graco’s competitors include Nordson Corp, Manitou BF SA, and Crane Co.

– Nordson Corp ($NASDAQ:NDSN)

Nordson Corp is a market leader in providing technology-based solutions for industrial and consumer markets worldwide. The company has a market cap of 12.1B as of 2022 and a Return on Equity of 18.05%. Nordson provides a broad range of products and solutions for adhesives, coatings, sealants, and other materials processing applications. The company’s products are used in a variety of industries, including automotive, aerospace, electronics, medical devices, and consumer goods. Nordson has a strong global presence, with over 60 manufacturing facilities and sales and service offices in more than 30 countries.

– Manitou BF SA ($LTS:0NDA)

Manitou BF SA is a French company that manufactures and markets construction equipment. The company has a market cap of 769.05M as of 2022 and a Return on Equity of 7.65%. Manitou BF SA’s products include excavators, loaders, and backhoes. The company sells its products through a network of dealers and distributors in Europe, North America, South America, Asia, and Africa.

– Crane Co ($NYSE:CR)

Crane Co. is a global manufacturer of engineered industrial products. The Company operates in four segments: Fluid Handling, Payment & Merchandising Technologies, Aerospace & Electronics and Engineered Materials. Fluid Handling segment designs, manufactures and markets a broad range of engineered industrial products. Payment & Merchandising Technologies segment provides technology solutions for the self-service retail market. Aerospace & Electronics segment provides critical components and systems for the aerospace and defense industries, and Engineered Materials segment provides highly engineered products for energy markets and other industrial applications. Crane Co. was founded in 1855 and is headquartered in Stamford, Connecticut.

Summary

GRACO INC reported robust fourth quarter earnings on January 30 2023 with total revenue reaching USD 126.2 million, a 5.0% year-over-year increase, and net income of USD 555.0 million, a 2.9% year-over-year increase. This strong performance indicates that GRACO INC is well-positioned for continued growth going forward. Investors should consider this stock as a long-term buy due to its high dividends, low debt ratio and positive cash flow.

Furthermore, GRACO’s share price has seen steady appreciation over the past year, suggesting there is further upside potential. With GRACO exhibiting strong financial fundamentals and strong market trends, it is an attractive stock for investors looking to add value to their portfolio.