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Should You Investigate First Industrial Realty Trust, Inc. (NYSE:FR) At US$34.43?

Simply Wall St

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, what if the stock is still a bargain? Let’s examine First Industrial Realty Trust’s valuation and outlook in more detail to determine if there’s still a bargain opportunity.

See our latest analysis for First Industrial Realty Trust

What's the opportunity in First Industrial Realty Trust?

Good news, investors! First Industrial Realty Trust is still a bargain right now. According to my valuation, the intrinsic value for the stock is $43.10, which is above what the market is valuing the company at the moment. This indicates a potential opportunity to buy low. What’s more interesting is that, First Industrial Realty Trust’s share price is theoretically quite stable, which could mean two things: firstly, it may take the share price a while to move to its intrinsic value, and secondly, there may be less chances to buy low in the future once it reaches that value. This is because the stock is less volatile than the wider market given its low beta.

Can we expect growth from First Industrial Realty Trust?

NYSE:FR Past and Future Earnings April 17th 2020
NYSE:FR Past and Future Earnings April 17th 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. Although value investors would argue that it’s the intrinsic value relative to the price that matter the most, a more compelling investment thesis would be high growth potential at a cheap price. 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? Although FR is currently undervalued, the adverse prospect of negative growth brings about some degree of risk. Consider whether you want to increase your portfolio exposure to FR, or whether diversifying into another stock may be a better move for your total risk and return.

Are you a potential investor? If you’ve been keeping an eye on FR for a while, but hesitant on making the leap, I recommend you research further into the stock. Given its current undervaluation, now is a great time to make a decision. But keep in mind the risks that come with negative growth prospects in the future.

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.

If you spot an error that warrants correction, please contact the editor at editorial-team@simplywallst.com. 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. Simply Wall St has no position in the stocks mentioned.

We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Thank you for reading.