Global sector MACC (Market-Assessed Cost of
Capital) now 17.7%, up 1,090bps from peak
valuation of 6.8% (end Q2 2007). MACC back at
historic peak although 2009e Cash-ROIC c200bps
better than previous trough: sector oversold?
􀀗 We forecast sector Cash-ROIC to trough in 2009
at 6.8%, down 170bps from 2007 peak of 8.5%.
Our MACC models work off the assumption that
forward long-term median Cash-ROIC of 8.2 % is
some 120 bps better than the 10yr historical
average Cash-ROIC of 7.0%, some 75% of our
coverage on a long-term rising Cash-ROIC trend
and 25% on a falling trend
􀀗 MACC analysis suggests the cheapest stocks in
our global Capital Goods coverage are Volvo
(MACC 27.8%), Metso (26.8%), Invensys (24.3%)
and Paccar (23.1%); and the most expensive
stocks are Doosan Heavy (8.8%), Smiths (10.9%),
BAE Systems (11.1%), Larsen & Toubro (12.0%)
and Emerson Electric (13.0%)
This is our eighth MACC (Market-Assessed Cost of Capital) valuation
summary for the global capital goods sector. MACC turns conventional
methodology on its head by comparing return on capital (Cash-ROIC) with
market value to get an estimate of the market’s assessment of risk (MACC).
This MACC value can then be compared with historical observations for the
same stock, or with contemporary observations for comparables. We are
revising our target prices for ABB India, BHEL, Emerson Electric (to which
we add a volatility flag to our Neutral rating) and Paccar.

目录

The Gospel According to
MACC 3
Q1 2009 sector conclusions 3
Q1 2009 stock conclusions 4
MACC: what it is 5
Modelling MACC 5
ABB 11
ABB India 20
Alstom 29
Atlas Copco 38
BAE Systems 47
BHEL 56
Doosan Heavy 65
Electrolux 74
Emerson Electric 83
Finmeccanica 92
Invensys 101
Larsen & Toubro 110
Legrand 119
MAN 128
Metso 137
Paccar 146
Philips 155
Rolls Royce 164
Samsung Heavy Industries 173
Sandvik 182
Scania 191
Schneider Electric 200
Siemens 209
SKF 218
Smiths Group 227
Thales 236
Volvo 245
Wärtsilä 254
Glossary 263
Disclosure appendix 267
Disclaimer 271