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What Is Masco Corporation's (NYSE:MAS) Share Price Doing?

Simply Wall St

Masco Corporation (NYSE:MAS) saw a double-digit share price rise of over 10% in the past couple of months on the NYSE. As a large-cap stock with high coverage by analysts, you could assume any recent changes in the company’s outlook is already priced into the stock. However, what if the stock is still a bargain? Let’s examine Masco’s valuation and outlook in more detail to determine if there’s still a bargain opportunity.

See our latest analysis for Masco

What is Masco worth?

The stock seems fairly valued at the moment according to my valuation model. It’s trading around 13.18% above my intrinsic value, which means if you buy Masco today, you’d be paying a relatively reasonable price for it. And if you believe the company’s true value is $42.65, then there isn’t really any room for the share price grow beyond what it’s currently trading. Is there another opportunity to buy low in the future? Since Masco’s share price is quite volatile, we could potentially see it sink lower (or rise higher) in the future, giving us another chance to buy. This is based on its high beta, which is a good indicator for how much the stock moves relative to the rest of the market.

Can we expect growth from Masco?

NYSE:MAS Past and Future Earnings, January 3rd 2020
NYSE:MAS Past and Future Earnings, January 3rd 2020

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 negative profit growth of -5.8% expected over the next couple of years, near-term growth certainly doesn’t appear to be a driver for a buy decision for Masco. This certainty tips the risk-return scale towards higher risk.

What this means for you:

Are you a shareholder? Currently, MAS 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 de-risk 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 an eye on MAS 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. Furthermore, 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 MAS 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 Masco. You can find everything you need to know about Masco in the latest infographic research report. If you are no longer interested in Masco, 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.