MAJOR ERRATUM ALERT: In my analysis above, I arrived at...

MAJOR ERRATUM ALERT:

In my analysis above, I arrived at valuation multiples of 14x P/E and 8.9x EV/EBITDA.

Erroneously, I said that these valuation multiples are based on the current $10.00 share price, when in fact they are based on share price of $14.00 (I mis-typed a "0" as a "4" in my spreadsheet).

At the current $10.00 share price, the scenario of WOR's Revenues basing itself some 15% lower at $5.0bn and restoration of EBIT margins to 7.2% (~200bp above their record-low FY2016 level, and ~350bp below their peak levels), the resulting valuation multiples are a most undemanding 10.0x P/E and 6.6x EV/EBITDA.

Meaning that if my base-case scenario comes to pass, there is significant upside to the share price (at least 40%, based on the maths).


Another way to view WOR's investment prospects is to ask the question:

Assuming a reasonable and appropriate P/E multiple of 15x, what is the current share price factoring in, in terms of Revenue and EBIT Margin?

And the answer is: an improbable combination of $4.0bn in Revenue (i.e., a further 33% fall from FY2016 to a level last seen in CY2007) at a 6.5% EBIT margin (i.e, a level in the bottom quartile of margins achieved by WOR over time).