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1. Company Snapshot

1.a. Company Description

Bodycote plc provides heat treatment and thermal processing services worldwide.The company operates in two Aerospace, Defence & Energy; and Automotive & General Industrial segments.It offers heat treatment services, including altering the microstructure of metals and alloys, such as steel and aluminum to impart properties comprising surface hardness, temperature resistance, ductility, and strength; metal joining services consisting of electron beam welding, HIP diffusion bonding, hydrogen brazing, induction brazing, and vacuum and honeycomb brazing; and hot isostatic pressing (HIP) services, including isostatic pressing and HIP supporting services, as well as Powdermet technology, a manufacturing process used in the production of complex components using powder metallurgy.


The company also provides surface technologies, which are used to prolong the working life of components and protect from environmental factors, such as corrosion and abrasion.Its surface technologies include anodizing, ceramic, flame and combustion spraying, high velocity oxygen fuel, plasma spray, electric arc spraying, aluminide coatings, liquid coatings, and thermo-chemically formed ceramic coatings to enhance corrosion protection and wear resistance.The company serves automotive, aerospace and defense, energy, and general industrial markets.


Bodycote plc was founded in 1923 and is headquartered in Macclesfield, the United Kingdom.

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1.b. Last Insights on BOY

Bodycote's recent performance has been positively influenced by its financial health, with a focus on intrinsic value growth. The company's projected fair value is estimated to be UK£11.12, indicating potential for growth (Source: 2 Stage Free Cash Flow to Equity). Additionally, the company has garnered attention from investors, with its stock being scrutinized at a price of UK£6.17. A substantial price increase has been observed, suggesting investor interest. Recent attention may also reflect the company's efforts to optimize its operations.

1.c. Company Highlights

2. Transcript Summary

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3. NewsRoom

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Should You Investigate Bodycote plc (LON:BOY) At UK£6.17?

Nov -03

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Has Bodycote plc (LON:BOY) Stock's Recent Performance Got Anything to Do With Its Financial Health?

Oct -17

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Bodycote plc (LON:BOY) Shares Could Be 42% Below Their Intrinsic Value Estimate

Sep -07

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Investing in Bodycote (LON:BOY) three years ago would have delivered you a 31% gain

Aug -23

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Bodycote (LON:BOY) Is Due To Pay A Dividend Of £0.069

Aug -02

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Bodycote Insider Ups Holding By 59% During Year

Jun -02

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Stocks to watch this week: Broadcom, Lululemon, British American Tobacco, Dr Martens and Rémy Cointreau

May -30

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Is There Now An Opportunity In Bodycote plc (LON:BOY)?

May -19

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4. Business Breakdown

4.a. Revenues by Country

4.b. Revenues by Segment

5. Expected revenues mid-term growth (5.89%)

6. Segments

Automotive and General Industrial

Expected Growth: 5%

Bodycote's Automotive segment growth is driven by increasing demand for electric vehicles, autonomous driving, and emission reduction technologies. General Industrial growth is fueled by rising demand for aerospace, oil and gas, and industrial gas turbine components, as well as the need for energy-efficient and environmentally friendly solutions.

Aerospace, Defense and Energy

Expected Growth: 7%

Bodycote's 7% growth in Aerospace, Defense, and Energy is driven by increasing demand for fuel-efficient aircraft, rising global defense spending, and growing investment in renewable energy sources. Additionally, the company's surface treatment and thermal processing services are in high demand, supporting the growth of these segments.

7. Detailed Products

Heat Treatment

Bodycote provides heat treatment services to improve the properties of metals and alloys, including hardening, tempering, and stress relieving.

Hot Isostatic Pressing (HIP)

Bodycote's HIP process uses high pressure and temperature to eliminate porosity and improve material properties.

Surface Technology

Bodycote offers surface coatings and treatments to enhance corrosion resistance, wear resistance, and aesthetics.

Materials Testing

Bodycote provides materials testing services, including mechanical testing, corrosion testing, and chemical analysis.

Nadcap Accredited Services

Bodycote offers Nadcap-accredited services, including heat treatment, testing, and inspection, for the aerospace and defense industries.

8. Bodycote plc's Porter Forces

Forces Ranking

Threat Of Substitutes

The threat of substitutes for Bodycote plc is medium due to the availability of alternative heat treatment services from competitors.

Bargaining Power Of Customers

The bargaining power of customers is low due to the specialized nature of Bodycote's services, making it difficult for customers to switch to alternative suppliers.

Bargaining Power Of Suppliers

The bargaining power of suppliers is medium due to the availability of alternative suppliers for raw materials and equipment.

Threat Of New Entrants

The threat of new entrants is low due to the high capital requirements and specialized expertise required to enter the heat treatment industry.

Intensity Of Rivalry

The intensity of rivalry is high due to the presence of several established competitors in the heat treatment industry, leading to a competitive market.

9. SWOT Analysis

Strength

Weaknesses

Opportunities

Threats

10. Capital Structure

10.a. Balance Sheet

10.b. Weighted Average Cost of capital

Value
Debt Weight 10.92%
Debt Cost 7.17%
Equity Weight 89.08%
Equity Cost 9.90%
WACC 9.61%
Leverage 12.25%

11. Quality Control: Bodycote plc passed 5 out of 9 key points

12.a Historical Valuation

12.b Price/Earnings Ratio

12.c Margin Valuation

12.d Peers Valuation

Peers Group Analysis

Stock-Card
Jensen-Group

A-Score: 6.1/10

Value: 7.0

Growth: 5.3

Quality: 7.0

Yield: 1.2

Momentum: 9.0

Volatility: 7.0

1-Year Total Return ->

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Stock-Card
Scanfil

A-Score: 6.0/10

Value: 5.4

Growth: 6.8

Quality: 6.7

Yield: 4.4

Momentum: 8.5

Volatility: 4.3

1-Year Total Return ->

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Stock-Card
WashTec

A-Score: 5.9/10

Value: 4.1

Growth: 5.0

Quality: 5.7

Yield: 8.1

Momentum: 5.5

Volatility: 7.0

1-Year Total Return ->

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Stock-Card
JOST Werke

A-Score: 5.6/10

Value: 6.2

Growth: 6.0

Quality: 3.2

Yield: 5.0

Momentum: 7.5

Volatility: 5.7

1-Year Total Return ->

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Stock-Card
Bodycote

A-Score: 4.8/10

Value: 4.6

Growth: 2.8

Quality: 4.3

Yield: 5.6

Momentum: 6.5

Volatility: 5.0

1-Year Total Return ->

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Stock-Card
Gévelot

A-Score: 4.6/10

Value: 7.2

Growth: 2.7

Quality: 4.6

Yield: 3.8

Momentum: 1.5

Volatility: 8.0

1-Year Total Return ->

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Peers Metrics

12.e Scoring Insights

12.f DCF BETA

Parameters

Short Term Growth

Short term Time

Long-Term Growth

WACC

Target Price

6.72$

Current Price

6.72$

Potential

-0.00%

Expected Cash-Flows