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Let's talk about the popular KBC Group NV (EBR:KBC). The company's shares received a lot of attention from a substantial price movement on the ENXTBR over the last few months, increasing to €67.48 at one point, and dropping to the lows of €56.28. 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 KBC Group's current trading price of €59.6 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 KBC Group’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 KBC Group?
Good news, investors! KBC Group is still a bargain right now. My valuation model shows that the intrinsic value for the stock is €83.12, but it is currently trading at €59.60 on the share market, meaning that there is still an opportunity to buy now. Another thing to keep in mind is that KBC Group’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.
Can we expect growth from KBC Group?
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 relatively muted profit growth of 8.6% expected over the next couple of years, growth doesn’t seem like a key driver for a buy decision for KBC Group, at least in the short term.
What this means for you:
Are you a shareholder? Even though growth is relatively muted, since KBC is currently undervalued, it may be a great time to increase your holdings in the stock. 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 KBC for a while, now might be the time to enter the stock. Its future outlook isn’t fully reflected in the current share price yet, which means it’s not too late to buy KBC. 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.
Price is just the tip of the iceberg. Dig deeper into what truly matters – the fundamentals – before you make a decision on KBC Group. You can find everything you need to know about KBC Group in the latest infographic research report. If you are no longer interested in KBC Group, you can use our free platform to see my list of over 50 other stocks with a high growth potential.
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.
If you spot an error that warrants correction, please contact the editor at email@example.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. Thank you for reading.