Resolute Forest Products Inc (NYSE:RFP), a forestry company based in Canada, saw a significant share price rise of over 20% in the past couple of months on the NYSE. With many analysts covering the stock, we may expect any price-sensitive announcements have already been factored into the stock’s share price. But what if there is still an opportunity to buy? Today I will analyse the most recent data on Resolute Forest Products’s outlook and valuation to see if the opportunity still exists. See our latest analysis for Resolute Forest Products
What is Resolute Forest Products worth?
Great news for investors – Resolute Forest Products is still trading at a fairly cheap price. My valuation model shows that the intrinsic value for the stock is $13.74, but it is currently trading at US$10.20 on the share market, meaning that there is still an opportunity to buy now. However, given that Resolute Forest Products’s share is fairly volatile (i.e. its price movements are magnified relative to the rest of the market) this could mean the price can sink lower, giving us another chance to buy in the future. This is based on its high beta, which is a good indicator for share price volatility.
What kind of growth will Resolute Forest Products 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. However, with a relatively muted revenue growth of 5.57% expected over the next couple of years, growth doesn’t seem like a key driver for a buy decision for Resolute Forest Products, at least in the short term.
What this means for you:
Are you a shareholder? Even though growth is relatively muted, since RFP is currently undervalued, it may be a great time to accumulate more of your holdings in the stock. However, there are also other factors such as financial health to consider, which could explain the current undervaluation.
Are you a potential investor? If you’ve been keeping an eye on RFP for a while, now might be the time to make a leap. Its future outlook isn’t fully reflected in the current share price yet, which means it’s not too late to buy RFP. 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 Resolute Forest Products. You can find everything you need to know about Resolute Forest Products in the latest infographic research report. If you are no longer interested in Resolute Forest Products, you can use our free platform to see my list of over 50 other stocks with a high growth potential.
To help readers see pass the short term volatility of the financial market, we aim to bring you a long-term focused research analysis purely driven by fundamental data. Note that our analysis does not factor in the latest price sensitive company announcements.
The author is an independent contributor and at the time of publication had no position in the stocks mentioned.