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What Does St. Modwen Properties PLC's (LON:SMP) Share Price Indicate?

Simply Wall St

While St. Modwen Properties PLC (LON:SMP) might not be the most widely known stock at the moment, it received a lot of attention from a substantial price movement on the LSE over the last few months, increasing to UK£3.70 at one point, and dropping to the lows of UK£3.03. Some share price movements can give investors a better opportunity to enter into the stock, and potentially buy at a lower price. A question to answer is whether St. Modwen Properties' current trading price of UK£3.22 reflective of the actual value of the small-cap? Or is it currently undervalued, providing us with the opportunity to buy? Let’s take a look at St. Modwen Properties’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 St. Modwen Properties

What is St. Modwen Properties worth?

The stock seems fairly valued at the moment according to my valuation model. It’s trading around 19.66% above my intrinsic value, which means if you buy St. Modwen Properties today, you’d be paying a relatively reasonable price for it. And if you believe that the stock is really worth £2.69, then there isn’t really any room for the share price grow beyond what it’s currently trading. What's more, St. Modwen Properties’s share price may be more stable over time (relative to the market), as indicated by its low beta.

What kind of growth will St. Modwen Properties 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. In the upcoming year, St. Modwen Properties’s earnings are expected to increase by 67%, indicating a highly optimistic future ahead. This should lead to more robust cash flows, feeding into a higher share value.

What this means for you:

Are you a shareholder? SMP’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 track record of its management team. Have these factors changed since the last time you looked at the stock? Will you have enough conviction to buy should the price fluctuates below the true value?

Are you a potential investor? If you’ve been keeping tabs on SMP, now may not be the most optimal time to buy, given it is trading around its fair value. However, the optimistic prospect is encouraging for the company, which means it’s worth further examining 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. For example - St. Modwen Properties has 1 warning sign we think you should be aware of.

If you are no longer interested in St. Modwen Properties, 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.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team@simplywallst.com.