In This Article:
Let's talk about the popular Siemens Aktiengesellschaft (ETR:SIE). The company's shares received a lot of attention from a substantial price movement on the XTRA over the last few months, increasing to €148 at one point, and dropping to the lows of €121. 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 Siemens' current trading price of €131 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 Siemens’s outlook and value based on the most recent financial data to see if there are any catalysts for a price change.
View our latest analysis for Siemens
Is Siemens Still Cheap?
Good news, investors! Siemens is still a bargain right now. My valuation model shows that the intrinsic value for the stock is €207.75, but it is currently trading at €131 on the share market, meaning that there is still an opportunity to buy now. What’s more interesting is that, Siemens’s share price is quite volatile, which gives us more chances to buy since the share price could sink lower (or rise higher) in the future. This is based on its high beta, which is a good indicator for how much the stock moves relative to the rest of the market.
What kind of growth will Siemens generate?
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. Though in the case of Siemens, it is expected to deliver a relatively unexciting earnings growth of 0.4%, which doesn’t help build up its investment thesis. Growth doesn’t appear to be a main reason for a buy decision for the company, at least in the near term.
What This Means For You
Are you a shareholder? Even though growth is relatively muted, since SIE is currently undervalued, it may be a great time to increase your holdings in the stock. However, there are also other factors such as capital structure to consider, which could explain the current undervaluation.
Are you a potential investor? If you’ve been keeping an eye on SIE 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 SIE. But before you make any investment decisions, consider other factors such as the track record of its management team, in order to make a well-informed investment decision.