Transferring Coverage of No-Moat USG; Increasing FVE to $36.50; Shares Are Undervalued
Upon the transfer of coverage to a new analyst, we have taken a fresh look at USG’s fundamentals and valuation. We increase our fair value estimate to $36.50 from $24.00 per share. The increase in our fair value estimate is mainly driven by our expectation of positive effects from USG’s sale of L&W Supply and higher U.S. gypsum subsegment profitability. Given L&W's relatively low profitability, removal of the segment’s projected cash flows has a minor effect on USG’s enterprise value, wh...USG is a manufacturer of building materials and solutions. The company's segments are: Gypsum, which manufactures and markets gypsum and related products primary used in a variety of building applications; Performance Materials, which manufactures and markets products used in a variety of interior and exterior building applications of residential, nonresidential buildings and industrial; Ceilings, which manufactures and markets ceiling interior systems products including ceiling tile, ceiling grid, and specialty ceilings; and USG Boral Building Products, which manufactures and distributes products for wall, ceiling, floor lining and exterior systems that utilize gypsum wallboard.
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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