Yahoo Finance Should You Think About Buying Balfour Beatty plc (LON:BBY) Now?
Balfour Beatty plc (LON:BBY), might not be a large cap stock, but it had a relatively subdued couple of weeks in terms of changes in share price, which continued to float around the range of UK£2.99 to UK£3.23. However, is this the true valuation level of the mid-cap? Or is it currently undervalued, providing us with the opportunity to buy? Let’s take a look at Balfour Beatty’s outlook and value based on the most recent financial data to see if there are any catalysts for a price change.
See our latest analysis for Balfour Beatty
What's the opportunity in Balfour Beatty?
The stock seems fairly valued at the moment according to my valuation model. It’s trading around 16% below my intrinsic value, which means if you buy Balfour Beatty today, you’d be paying a reasonable price for it. And if you believe that the stock is really worth £3.70, then there isn’t much room for the share price grow beyond what it’s currently trading. What's more, Balfour Beatty’s share price may be more stable over time (relative to the market), as indicated by its low beta.
What kind of growth will Balfour Beatty generate?
Investors looking for growth in their portfolio may want to consider the prospects of a company before buying its shares. Buying a great company with a robust outlook at a cheap price is always a good investment, so let’s also take a look at the company's future expectations. Balfour Beatty's earnings over the next few years are expected to double, indicating a very optimistic future ahead. This should lead to stronger cash flows, feeding into a higher share value.
What this means for you:
Are you a shareholder? BBY’s optimistic future growth appears to have been factored into the current share price, with shares trading around its fair value. However, there are also other important factors which we haven’t considered today, such as the financial strength of the company. Have these factors changed since the last time you looked at the stock? Will you have enough confidence to invest in the company should the price drop below its fair value?
Are you a potential investor? If you’ve been keeping an eye on BBY, now may not be the most advantageous time to buy, given it is trading around its fair value. However, the positive outlook is encouraging for the company, which means it’s worth diving deeper into other factors such as the strength of its balance sheet, in order to take advantage of the next price drop.
In light of this, if you'd like to do more analysis on the company, it's vital to be informed of the risks involved. Be aware that Balfour Beatty is showing 3 warning signs in our investment analysis and 1 of those is a bit unpleasant...
If you are no longer interested in Balfour Beatty, you can use our free platform to see our list of over 50 other stocks with a high growth potential.
This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.
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