U.S. markets closed
  • S&P 500

    4,071.70
    -4.87 (-0.12%)
     
  • Dow 30

    34,429.88
    +34.87 (+0.10%)
     
  • Nasdaq

    11,461.50
    -20.95 (-0.18%)
     
  • Russell 2000

    1,892.84
    +11.16 (+0.59%)
     
  • Crude Oil

    80.34
    -0.88 (-1.08%)
     
  • Gold

    1,797.30
    -3.80 (-0.21%)
     
  • Silver

    23.35
    +0.51 (+2.25%)
     
  • EUR/USD

    1.0531
    +0.0002 (+0.02%)
     
  • 10-Yr Bond

    3.5060
    -0.0230 (-0.65%)
     
  • GBP/USD

    1.2296
    +0.0040 (+0.33%)
     
  • USD/JPY

    134.2900
    -1.0160 (-0.75%)
     
  • BTC-USD

    16,951.69
    -14.63 (-0.09%)
     
  • CMC Crypto 200

    404.33
    +2.91 (+0.72%)
     
  • FTSE 100

    7,556.23
    -2.26 (-0.03%)
     
  • Nikkei 225

    27,777.90
    -448.18 (-1.59%)
     

Should You Think About Buying Incitec Pivot Limited (ASX:IPL) Now?

Incitec Pivot Limited (ASX:IPL), is not the largest company out there, but it saw a decent share price growth in the teens level on the ASX over the last few months. 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. But what if there is still an opportunity to buy? Today I will analyse the most recent data on Incitec Pivot’s outlook and valuation to see if the opportunity still exists.

See our latest analysis for Incitec Pivot

What Is Incitec Pivot Worth?

Great news for investors – Incitec Pivot is still trading at a fairly cheap price. According to my valuation, the intrinsic value for the stock is A$6.32, which is above what the market is valuing the company at the moment. This indicates a potential opportunity to buy low. Another thing to keep in mind is that Incitec Pivot’s share price may be quite stable relative to the rest of the market, as indicated by its low beta. This means that if you believe the current share price should move towards its intrinsic value over time, a low beta could suggest it is not likely to reach that level anytime soon, and once it’s there, it may be hard to fall back down into an attractive buying range again.

What kind of growth will Incitec Pivot generate?

earnings-and-revenue-growth
earnings-and-revenue-growth

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. With profit expected to grow by a double-digit 12% over the next couple of years, the outlook is positive for Incitec Pivot. It looks like higher cash flow is on the cards for the stock, which should feed into a higher share valuation.

What This Means For You

Are you a shareholder? Since IPL is currently undervalued, it may be a great time to accumulate more of your holdings in the stock. With an optimistic outlook on the horizon, it seems like this growth has not yet been fully factored into the share price. However, there are also other factors such as financial health to consider, which could explain the current undervaluation.

Are you a potential investor? If you’ve been keeping an eye on IPL for a while, now might be the time to enter the stock. Its prosperous future outlook isn’t fully reflected in the current share price yet, which means it’s not too late to buy IPL. 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.

If you want to dive deeper into Incitec Pivot, you'd also look into what risks it is currently facing. To help with this, we've discovered 3 warning signs (1 is potentially serious!) that you ought to be aware of before buying any shares in Incitec Pivot.

If you are no longer interested in Incitec Pivot, you can use our free platform to see our list of over 50 other stocks with a high growth potential.

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

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.

Join A Paid User Research Session
You’ll receive a US$30 Amazon Gift card for 1 hour of your time while helping us build better investing tools for the individual investors like yourself. Sign up here