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Neste Oyj (HLSE:NESTE) saw significant share price volatility over the past couple of months on the HLSE, rising to the highs of €61.76 and falling to the lows of €52.58. This high level of volatility gives investors the opportunity to enter into the stock, and potentially buy at an artificially low price. A question to answer is whether Neste Oyj’s current trading price of €56.6 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 Neste Oyj’s outlook and value based on the most recent financial data to see if there are any catalysts for a price change. Check out our latest analysis for Neste Oyj
What is Neste Oyj worth?
The stock seems fairly valued at the moment according to my valuation model. It’s trading around 13% above my intrinsic value, which means if you buy Neste Oyj today, you’d be paying a relatively fair price for it. And if you believe the company’s true value is €50.16, then there isn’t really any room for the share price grow beyond what it’s currently trading. Furthermore, it seems like Neste Oyj’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.
What does the future of Neste Oyj look like?
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. Neste Oyj’s earnings growth are expected to be in the teens in the upcoming years, indicating a solid future ahead. This should lead to robust cash flows, feeding into a higher share value.
What this means for you:
Are you a shareholder? NESTE’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 track record of its management team. Have these factors changed since the last time you looked at the stock? Will you have enough conviction to buy should the price fluctuates below the true value?
Are you a potential investor? If you’ve been keeping an eye on NESTE, now may not be the most advantageous 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 further examining other factors such as the strength of its balance sheet, in order to take advantage of the next price drop.