At US$42.50, Is It Time To Put Greif, Inc. (NYSE:GEF) On Your Watch List?
Greif, Inc. (NYSE:GEF), which is in the packaging business, and is based in United States, led the NYSE gainers with a relatively large price hike in the past couple of weeks. As a US$2.2b market-cap stock, it seems odd Greif is not more well-covered by analysts. However, this is not necessarily a bad thing given that there are less eyes on the stock to push it closer to fair value. Is there still an opportunity to buy? Let’s examine Greif’s valuation and outlook in more detail to determine if there’s still a bargain opportunity.
Check out our latest analysis for Greif
Is Greif still cheap?
According to my valuation model, Greif seems to be fairly priced at around 12.04% above my intrinsic value, which means if you buy Greif today, you’d be paying a relatively fair price for it. And if you believe the company’s true value is $37.93, there’s only an insignificant downside when the price falls to its real value. So, is there another chance to buy low in the future? Given that Greif’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 an opportunity to buy later on. This is based on its high beta, which is a good indicator for share price volatility.
Can we expect growth from Greif?
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. 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. Greif’s earnings over the next few years are expected to increase by 44%, indicating a highly optimistic future ahead. This should lead to more robust cash flows, feeding into a higher share value.
What this means for you:
Are you a shareholder? GEF’s optimistic future growth appears to have been factored into the current share price, with shares trading around its fair value. However, there are also other important factors which we haven’t considered today, such as the financial strength of the company. Have these factors changed since the last time you looked at the stock? Will you have enough confidence to invest in the company should the price drop below its fair value?
Are you a potential investor? If you’ve been keeping an eye on GEF, now may not be the most optimal time to buy, given it is trading around its fair value. However, the positive outlook is encouraging for the company, which means it’s worth diving deeper into other factors such as the strength of its balance sheet, 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 Greif. You can find everything you need to know about Greif in the latest infographic research report. If you are no longer interested in Greif, 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 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. Thank you for reading.
