Natixis SA (EPA:KN) received a lot of attention from a substantial price movement on the ENXTPA over the last few months, increasing to €6.11 at one point, and dropping to the lows of €4.44. This high level of volatility gives investors the opportunity to enter into the stock, and potentially buy at an artificially low price. A question to answer is whether Natixis’s current trading price of €4.44 reflective of the actual value of the large-cap? Or is it currently undervalued, providing us with the opportunity to buy? Let’s take a look at Natixis’s outlook and value based on the most recent financial data to see if there are any catalysts for a price change.
What’s the opportunity in Natixis?
According to my valuation model, the stock is currently overvalued by about 36.13%, trading at €4.44 compared to my intrinsic value of €3.26. This means that the opportunity to buy Natixis at a good price has disappeared! But, is there another opportunity to buy low in the future? Given that Natixis’s share is fairly volatile (i.e. its price movements are magnified relative to the rest of the market) this could mean the price can sink lower, giving us another chance to buy in the future. This is based on its high beta, which is a good indicator for share price volatility.
What does the future of Natixis look like?
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. Natixis’s earnings growth are expected to be in the teens in the upcoming years, indicating a solid future ahead. This should lead to robust cash flows, feeding into a higher share value.
What this means for you:
Are you a shareholder? It seems like the market has well and truly priced in KN’s positive outlook, with shares trading above its fair value. However, this brings up another question – is now the right time to sell? If you believe KN should trade below its current price, selling high and buying it back up again when its price falls towards its real value can be profitable. But before you make this decision, take a look at whether its fundamentals have changed.
Are you a potential investor? If you’ve been keeping an eye on KN for a while, now may not be the best time to enter into the stock. The price has surpassed its true value, which means there’s no upside from mispricing. However, the positive outlook is encouraging for KN, which means it’s worth diving deeper into other factors in order to take advantage of the next price drop.
Price is just the tip of the iceberg. Dig deeper into what truly matters – the fundamentals – before you make a decision on Natixis. You can find everything you need to know about Natixis in the latest infographic research report. If you are no longer interested in Natixis, you can use our free platform to see my list of over 50 other stocks with a high growth potential.
To help readers see past the short term volatility of the financial market, we aim to bring you a long-term focused research analysis purely driven by fundamental data. Note that our analysis does not factor in the latest price-sensitive company announcements.
The author is an independent contributor and at the time of publication had no position in the stocks mentioned. For errors that warrant correction please contact the editor at firstname.lastname@example.org.