Investment thesis:
Univar has enough liquidity to survive the downturn caused by COVID-19 and I expect the company to generate positive FCF and earnings however long it lasts. Based on a forward P/E of around 14x (historical median) I’m expecting GAAP EPS in the range of $1.63 by 2024 (300M net income,175M shares outstanding, pre-tax margin of 3.3%, EBIT margin 4.5%) with a fair value of around $22/share.
I’ll note that my growth and margin assumptions are on the lower-end of what Brenntag has been delivering, so I think this price target for UNVR represents