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Breville Group Limited (ASX:BRG), is not the largest company out there, but it led the ASX gainers with a relatively large price hike in the past couple of weeks. The recent rally in share prices has nudged the company in the right direction, though it still falls short of its yearly peak. As a mid-cap stock with high coverage by analysts, you could assume any recent changes in the company’s outlook is already priced into the stock. However, what if the stock is still a bargain? Today we will analyse the most recent data on Breville Group’s outlook and valuation to see if the opportunity still exists.
Is Breville Group Still Cheap?
According to our valuation model, Breville Group seems to be fairly priced at around 9.57% above our intrinsic value, which means if you buy Breville Group today, you’d be paying a relatively reasonable price for it. And if you believe the company’s true value is A$28.26, then there isn’t really any room for the share price grow beyond what it’s currently trading. What's more, Breville Group’s share price may be more stable over time (relative to the market), as indicated by its low beta.
View our latest analysis for Breville Group
What kind of growth will Breville Group 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. With profit expected to grow by 27% over the next couple of years, the future seems bright for Breville Group. It looks like higher cash flow is on the cards for the stock, which should feed into a higher share valuation.
What This Means For You
Are you a shareholder? It seems like the market has already priced in BRG’s positive outlook, with shares trading around its fair value. However, there are also other important factors which we haven’t considered today, such as the track record of its management team. 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 BRG, now may not be the most optimal time to buy, given it is trading around its fair value. However, the optimistic prospect 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.