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First Industrial Realty Trust, Inc. (NYSE:FR), which is in the reits business, and is based in United States, saw a significant share price rise of over 20% in the past couple of months on the NYSE. 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, could the stock still be trading at a relatively cheap price? Let’s take a look at First Industrial Realty Trust’s outlook and value based on the most recent financial data to see if the opportunity still exists.
What’s the opportunity in First Industrial Realty Trust?
According to my valuation model, First Industrial Realty Trust seems to be fairly priced at around 17.62% above my intrinsic value, which means if you buy First Industrial Realty Trust today, you’d be paying a relatively reasonable price for it. And if you believe the company’s true value is $28.55, then there isn’t really any room for the share price grow beyond what it’s currently trading. What’s more, First Industrial Realty Trust’s share price may be more stable over time (relative to the market), as indicated by its low beta.
What does the future of First Industrial Realty Trust look like?
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. However, with an extremely negative double-digit change in profit expected over the next couple of years, near-term growth is certainly not a driver of a buy decision. It seems like high uncertainty is on the cards for First Industrial Realty Trust, at least in the near future.
What this means for you:
Are you a shareholder? Currently, FR appears to be trading around its fair value, but given the uncertainty from negative returns in the future, this could be the right time to reduce the risk in your portfolio. Is your current exposure to the stock beneficial for your total portfolio? And is the opportunity cost of holding a negative-outlook stock too high? Before you make a decision on the stock, take a look at whether its fundamentals have changed.
Are you a potential investor? If you’ve been keeping tabs on FR for a while, now may not be the most optimal time to buy, given it is trading around its fair value. The stock appears to be trading at fair value, which means there’s less benefit from mispricing. In addition to this, the negative growth outlook increases the risk of holding the stock. However, there are also other important factors we haven’t considered today, which can help crystalize your views on FR should the price fluctuate below its true value.
Price is just the tip of the iceberg. Dig deeper into what truly matters – the fundamentals – before you make a decision on First Industrial Realty Trust. You can find everything you need to know about First Industrial Realty Trust in the latest infographic research report. If you are no longer interested in First Industrial Realty Trust, you can use our free platform to see my list of over 50 other stocks with a high growth potential.
To help readers see past 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. For errors that warrant correction please contact the editor at email@example.com.