Is Lendlease Group (ASX:LLC) Potentially Undervalued?
Lendlease Group (ASX:LLC), is not the largest company out there, but it saw significant share price movement during recent months on the ASX, rising to highs of AU$8.48 and falling to the lows of AU$6.12. 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 Lendlease Group's current trading price of AU$6.70 reflective of the actual value of the mid-cap? Or is it currently undervalued, providing us with the opportunity to buy? Let’s take a look at Lendlease Group’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 Lendlease Group
What Is Lendlease Group Worth?
Great news for investors – Lendlease Group is still trading at a fairly cheap price. My valuation model shows that the intrinsic value for the stock is A$11.05, but it is currently trading at AU$6.70 on the share market, meaning that there is still an opportunity to buy now. What’s more interesting is that, Lendlease Group’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.
What does the future of Lendlease Group look like?
Investors looking for growth in their portfolio may want to consider the prospects of a company before buying its shares. 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 a relatively muted revenue growth of 0.2% expected over the next couple of years, growth doesn’t seem like a key driver for a buy decision for Lendlease Group, at least in the short term.
What This Means For You
Are you a shareholder? Even though growth is relatively muted, since LLC 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 capital structure to consider, which could explain the current undervaluation.
Are you a potential investor? If you’ve been keeping an eye on LLC 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 LLC. 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 buy.
Diving deeper into the forecasts for Lendlease Group mentioned earlier will help you understand how analysts view the stock going forward. So feel free to check out our free graph representing analyst forecasts.
If you are no longer interested in Lendlease Group, you can use our free platform to see our 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. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. 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.
