TERNA-RETE ELETTRICA NAZIONA (TRN.MI) Stock Fundamental Analysis
Europe - Euronext Milan - BIT:TRN - IT0003242622 - Common Stock
9.12 EUR
+0.06 (+0.62%)
TRN gets a fundamental rating of 5 out of 10. The analysis compared the fundamentals against 29 industry peers in the Electric Utilities industry. TRN has an excellent profitability rating, but there are concerns on its financial health. TRN is not valued too expensively and it also shows a decent growth rate. TRN also has an excellent dividend rating.
1. Profitability
1.1 Basic Checks
- TRN had positive earnings in the past year.
- TRN had a positive operating cash flow in the past year.
- TRN had positive earnings in each of the past 5 years.
- Each year in the past 5 years TRN had a positive operating cash flow.
1.2 Ratios
- With a decent Return On Assets value of 5.70%, TRN is doing good in the industry, outperforming 79.31% of the companies in the same industry.
- With a decent Return On Equity value of 21.30%, TRN is doing good in the industry, outperforming 75.86% of the companies in the same industry.
- TRN has a better Return On Invested Capital (8.22%) than 72.41% of its industry peers.
- The Average Return On Invested Capital over the past 3 years for TRN is in line with the industry average of 6.40%.
- The last Return On Invested Capital (8.22%) for TRN is above the 3 year average (5.42%), which is a sign of increasing profitability.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 5.7% | ||
| ROE | 21.3% | ||
| ROIC | 8.22% |
ROA(3y)3.81%
ROA(5y)3.76%
ROE(3y)14.02%
ROE(5y)15.38%
ROIC(3y)5.42%
ROIC(5y)5.17%
1.3 Margins
- With an excellent Profit Margin value of 28.88%, TRN belongs to the best of the industry, outperforming 100.00% of the companies in the same industry.
- In the last couple of years the Profit Margin of TRN has declined.
- TRN has a Operating Margin of 47.14%. This is amongst the best in the industry. TRN outperforms 96.55% of its industry peers.
- In the last couple of years the Operating Margin of TRN has remained more or less at the same level.
- TRN's Gross Margin of 80.75% is fine compared to the rest of the industry. TRN outperforms 79.31% of its industry peers.
- In the last couple of years the Gross Margin of TRN has remained more or less at the same level.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 47.14% | ||
| PM (TTM) | 28.88% | ||
| GM | 80.75% |
OM growth 3Y-0.34%
OM growth 5Y-1.39%
PM growth 3Y-1.94%
PM growth 5Y-2.37%
GM growth 3Y0.01%
GM growth 5Y-0.57%
2. Health
2.1 Basic Checks
- TRN has a Return on Invested Capital (ROIC), which is just above the Cost of Capital (WACC), which means it is creating some value.
- The number of shares outstanding for TRN remains at a similar level compared to 1 year ago.
- TRN has less shares outstanding than it did 5 years ago.
- TRN has a better debt/assets ratio than last year.
2.2 Solvency
- TRN has an Altman-Z score of 1.23. This is a bad value and indicates that TRN is not financially healthy and even has some risk of bankruptcy.
- TRN has a Altman-Z score (1.23) which is comparable to the rest of the industry.
- A Debt/Equity ratio of 1.78 is on the high side and indicates that TRN has dependencies on debt financing.
- TRN's Debt to Equity ratio of 1.78 is on the low side compared to the rest of the industry. TRN is outperformed by 79.31% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 1.78 | ||
| Debt/FCF | N/A | ||
| Altman-Z | 1.23 |
ROIC/WACC1.46
WACC5.64%
2.3 Liquidity
- A Current Ratio of 0.81 indicates that TRN may have some problems paying its short term obligations.
- Looking at the Current ratio, with a value of 0.81, TRN is in line with its industry, outperforming 44.83% of the companies in the same industry.
- TRN has a Quick Ratio of 0.81. This is a bad value and indicates that TRN is not financially healthy enough and could expect problems in meeting its short term obligations.
- TRN has a Quick ratio (0.79) which is comparable to the rest of the industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 0.81 | ||
| Quick Ratio | 0.79 |
3. Growth
3.1 Past
- The Earnings Per Share has been growing slightly by 6.58% over the past year.
- The Earnings Per Share has been growing slightly by 6.80% on average over the past years.
- The Revenue has grown by 15.80% in the past year. This is quite good.
- The Revenue has been growing by 9.59% on average over the past years. This is quite good.
EPS 1Y (TTM)6.58%
EPS 3Y9.92%
EPS 5Y6.8%
EPS Q2Q%0%
Revenue 1Y (TTM)15.8%
Revenue growth 3Y12.58%
Revenue growth 5Y9.59%
Sales Q2Q%10.65%
3.2 Future
- TRN is expected to show a small growth in Earnings Per Share. In the coming years, the EPS will grow by 3.26% yearly.
- Based on estimates for the next years, TRN will show a small growth in Revenue. The Revenue will grow by 7.88% on average per year.
EPS Next Y4.65%
EPS Next 2Y2.45%
EPS Next 3Y3.29%
EPS Next 5Y3.26%
Revenue Next Year11.03%
Revenue Next 2Y9.25%
Revenue Next 3Y9.31%
Revenue Next 5Y7.88%
3.3 Evolution
- The EPS growth rate is decreasing: in the next years the growth will be less than in the last years.
- The Revenue growth rate is stable: in the next years the growth will be about the same than in the last years.
4. Valuation
4.1 Price/Earnings Ratio
- The Price/Earnings ratio is 16.58, which indicates a correct valuation of TRN.
- Compared to the rest of the industry, the Price/Earnings ratio of TRN indicates a somewhat cheap valuation: TRN is cheaper than 68.97% of the companies listed in the same industry.
- TRN is valuated rather cheaply when we compare the Price/Earnings ratio to 28.39, which is the current average of the S&P500 Index.
- A Price/Forward Earnings ratio of 16.77 indicates a correct valuation of TRN.
- Based on the Price/Forward Earnings ratio, TRN is valued a bit cheaper than 62.07% of the companies in the same industry.
- Compared to an average S&P500 Price/Forward Earnings ratio of 25.72, TRN is valued a bit cheaper.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 16.58 | ||
| Fwd PE | 16.77 |
4.2 Price Multiples
- TRN's Enterprise Value to EBITDA ratio is a bit cheaper when compared to the industry. TRN is cheaper than 75.86% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | N/A | ||
| EV/EBITDA | 7.9 |
4.3 Compensation for Growth
- The high PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates an expensive valuation of the company.
- TRN has a very decent profitability rating, which may justify a higher PE ratio.
PEG (NY)3.56
PEG (5Y)2.44
EPS Next 2Y2.45%
EPS Next 3Y3.29%
5. Dividend
5.1 Amount
- TRN has a Yearly Dividend Yield of 4.41%, which is a nice return.
- TRN's Dividend Yield is a higher than the industry average which is at 3.10.
- TRN's Dividend Yield is rather good when compared to the S&P500 average which is at 1.82.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 4.41% |
5.2 History
- On average, the dividend of TRN grows each year by 7.81%, which is quite nice.
Dividend Growth(5Y)7.81%
Div Incr Years0
Div Non Decr Years0
5.3 Sustainability
- TRN pays out 49.65% of its income as dividend. This is a bit on the high side, but may be sustainable.
- TRN's earnings are growing slower than its dividend. This means the dividend growth is not sustainable.
DP49.65%
EPS Next 2Y2.45%
EPS Next 3Y3.29%
TERNA-RETE ELETTRICA NAZIONA / TRN.MI FAQ
What is the ChartMill fundamental rating of TERNA-RETE ELETTRICA NAZIONA (TRN.MI) stock?
ChartMill assigns a fundamental rating of 5 / 10 to TRN.MI.
Can you provide the valuation status for TERNA-RETE ELETTRICA NAZIONA?
ChartMill assigns a valuation rating of 4 / 10 to TERNA-RETE ELETTRICA NAZIONA (TRN.MI). This can be considered as Fairly Valued.
Can you provide the profitability details for TERNA-RETE ELETTRICA NAZIONA?
TERNA-RETE ELETTRICA NAZIONA (TRN.MI) has a profitability rating of 7 / 10.
Can you provide the financial health for TRN stock?
The financial health rating of TERNA-RETE ELETTRICA NAZIONA (TRN.MI) is 2 / 10.
How sustainable is the dividend of TERNA-RETE ELETTRICA NAZIONA (TRN.MI) stock?
The dividend rating of TERNA-RETE ELETTRICA NAZIONA (TRN.MI) is 7 / 10 and the dividend payout ratio is 49.65%.