Lowering Sasol Fair Value Estimate; Stock Still Overvalued
We are relaunching coverage of Sasol and lowering our fair value estimate slightly from $23 (ZAR 314) to $21 (ZAR 290). Trading near $30 (ZAR 414), which represents a 40% premium to our fair value estimate, the stock continues to look overvalued.Sasol’s vertical integration affords the company with increasing operating margins as commodity prices increase and the company’s cost of production remains relatively constant. However, in our forecast midcycle environment, the company is not able to t...
Sasol is engaged in manufacturing and marketing of liquid fuels, gas and chemicals. Co. adds value to coal, oil and gas reserves, using these feedstocks to produce liquid fuels, fuel components and chemicals. Co. mines coal and refines imported crude oil and retails liquid fuel products in South Africa, and produces gas and condensate in Mozambique and oil in Gabon. Co. also supplies fuels to oil companies in South Africa and others in South Africa and sub-Saharan Africa. Co. maintains its chemical manufacturing and marketing operations worldwide. Co. divides its operations into three focused business clusters: South African Energy Cluster, International Energy Cluster and Chemical Cluster.
Morningstar, Inc. is a leading provider of independent investment research in North America, Europe, Australia, and Asia. The company offer an extensive line of products and services for individual investors, financial advisors, asset managers, and retirement plan providers and sponsors.
Morningstar provides data on approximately 530,000 investment offerings, including stocks, mutual funds, and similar vehicles, along with real-time global market data on more than 18 million equities, indexes, futures, options, commodities, and precious metals, in addition to foreign exchange and Treasury markets. Morningstar also offers investment management services through its investment advisory subsidiaries and had approximately $185 billion in assets under advisement and management as of June 30, 2016.
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