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Is It Time To Consider Buying Cathay Pacific Airways Limited (HKG:293)?

Simply Wall St

Cathay Pacific Airways Limited (HKG:293), which is in the airlines business, and is based in Hong Kong, saw a decent share price growth in the teens level on the SEHK over the last few months. With many analysts covering the mid-cap stock, we may expect any price-sensitive announcements have already been factored into the stock’s share price. However, what if the stock is still a bargain? Let’s take a look at Cathay Pacific Airways’s outlook and value based on the most recent financial data to see if the opportunity still exists.

See our latest analysis for Cathay Pacific Airways

Is Cathay Pacific Airways still cheap?

Great news for investors – Cathay Pacific Airways is still trading at a fairly cheap price. According to my valuation, the intrinsic value for the stock is HK$12.49, but it is currently trading at HK$8.56 on the share market, meaning that there is still an opportunity to buy now. What’s more interesting is that, Cathay Pacific Airways’s share price is quite volatile, which gives us more chances to buy since the share price could sink lower (or rise higher) in the future. This is based on its high beta, which is a good indicator for how much the stock moves relative to the rest of the market.

Can we expect growth from Cathay Pacific Airways?

SEHK:293 Past and Future Earnings May 19th 2020

Future outlook is an important aspect when you’re looking at buying a stock, especially if you are an investor looking for growth in your portfolio. 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. With profit expected to grow by 79% over the next couple of years, the future seems bright for Cathay Pacific Airways. It looks like higher cash flow is on the cards for the stock, which should feed into a higher share valuation.

What this means for you:

Are you a shareholder? Since 293 is currently undervalued, it may be a great time to accumulate more of your holdings in the stock. With a positive outlook on the horizon, it seems like this growth has not yet been fully factored into the share price. However, there are also other factors such as capital structure to consider, which could explain the current undervaluation.

Are you a potential investor? If you’ve been keeping an eye on 293 for a while, now might be the time to enter the stock. Its buoyant future outlook isn’t fully reflected in the current share price yet, which means it’s not too late to buy 293. But before you make any investment decisions, consider other factors such as the strength of its balance sheet, in order to make a well-informed investment decision.

Price is just the tip of the iceberg. Dig deeper into what truly matters – the fundamentals – before you make a decision on Cathay Pacific Airways. You can find everything you need to know about Cathay Pacific Airways in the latest infographic research report. If you are no longer interested in Cathay Pacific Airways, you can use our free platform to see my list of over 50 other stocks with a high growth potential.

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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. Thank you for reading.