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LEG Immobilien SE (ETR:LEG), is not the largest company out there, but it received a lot of attention from a substantial price movement on the XTRA over the last few months, increasing to €96.10 at one point, and dropping to the lows of €79.32. 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 LEG Immobilien's current trading price of €79.64 reflective of the actual value of the mid-cap? Or is it currently undervalued, providing us with the opportunity to buy? Let’s take a look at LEG Immobilien’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 LEG Immobilien
What Is LEG Immobilien Worth?
According to our valuation model, the stock is currently overvalued by about 35%, trading at €79.64 compared to our intrinsic value of €58.89. This means that the opportunity to buy LEG Immobilien at a good price has disappeared! Another thing to keep in mind is that LEG Immobilien’s share price is quite stable relative to the market, as indicated by its low beta. This means that if you believe the current share price should move towards its intrinsic value over time, a low beta could suggest it is not likely to reach that level anytime soon, and once it’s there, it may be hard to fall back down into an attractive buying range again.
What kind of growth will LEG Immobilien 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. However, with an extreme expected decline in the top-line over the next couple of years, near-term growth is certainly not a driver of a buy decision. Even with a larger decline in expenses, it seems like high uncertainty is on the cards for LEG Immobilien.
What This Means For You
Are you a shareholder? If you believe LEG should trade below its current price, selling high and buying it back up again when its price falls towards its real value can be profitable. Given the risk from a negative growth outlook, this could be the right time to de-risk your portfolio. But before you make this decision, take a look at whether its fundamentals have changed.
Are you a potential investor? If you’ve been keeping an eye on LEG for a while, now may not be the best time to enter into the stock. The company’s price climbed passed its true value, in addition to a risky future outlook. However, there are also other important factors which we haven’t considered today, such as the track record of its management. Should the price fall in the future, will you be well-informed enough to buy?