What Is Westfield Corporation’s (ASX:WFD) Share Price Doing?
Today we’re going to take a look at the well-established Westfield Corporation (ASX:WFD). The company’s stock had a relatively subdued couple of weeks in terms of changes in share price, which continued to float around the range of A$8.41 to A$9.2. However, is this the true valuation level of the large-cap? Or is it currently undervalued, providing us with the opportunity to buy? Let’s take a look at Westfield’s outlook and value based on the most recent financial data to see if there are any catalysts for a price change. View out our latest analysis for Westfield
What is Westfield worth?
According to my valuation model, Westfield seems to be fairly priced at around 14.55% above my intrinsic value, which means if you buy Westfield today, you’d be paying a relatively fair price for it. And if you believe the company’s true value is A$7.72, then there isn’t really any room for the share price grow beyond what it’s currently trading. Furthermore, it seems like Westfield’s share price is quite stable, which means there may be less chances to buy low in the future now that it’s fairly valued. This is because the stock is less volatile than the wider market given its low beta.
Can we expect growth from Westfield?
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 -8.42% expected over the next couple of years, near-term growth certainly doesn’t appear to be a driver for a buy decision for Westfield. This certainty tips the risk-return scale towards higher risk.
What this means for you:
Are you a shareholder? Currently, WFD 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 optimal 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 tabs on WFD 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. In addition to this, 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 WFD 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 Westfield. You can find everything you need to know about Westfield in the latest infographic research report. If you are no longer interested in Westfield, you can use our free platform to see my list of over 50 other stocks with a high growth potential.
To help readers see pass 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.
