Amidst a backdrop of global economic fluctuations and trade tensions, the Swedish stock market presents unique opportunities for investors looking for value. As markets worldwide show mixed responses to macroeconomic signals, understanding the intrinsic worth of stocks becomes crucial in identifying potential investment opportunities in Sweden.
Top 10 Undervalued Stocks Based On Cash Flows In Sweden
Overview: Billerud AB (publ) is a global provider of paper and packaging materials, with a market capitalization of approximately SEK 26.91 billion.
Operations: Billerud's revenue is primarily generated from Europe and North America, totaling SEK 27.08 billion and SEK 11.35 billion respectively, along with an additional SEK 2.77 billion from various solutions and services excluding currency hedging activities.
Estimated Discount To Fair Value: 22.4%
Billerud is currently priced at SEK108.2, which is 22.4% below our calculated fair value of SEK139.48, indicating that it may be undervalued. Despite a low return on equity forecast of 8.6%, Billerud's earnings are expected to grow by 32.3% annually over the next three years, outpacing the Swedish market's average of 15.3%. Recent financials show a rebound with second-quarter sales up to SEK10.76 billion from SEK9.95 billion last year and a net income turnaround to SEK63 million from a loss of SEK481 million in the same period last year.
Overview: Lindab International AB, a company based in Europe, specializes in manufacturing and selling products and solutions for ventilation systems, with a market capitalization of approximately SEK 19.87 billion.
Operations: The company generates revenue primarily through two segments: Profile Systems, which brought in SEK 3.28 billion, and Ventilation Systems, contributing SEK 9.95 billion.
Estimated Discount To Fair Value: 44.9%
Lindab International, with a current trading price of SEK258.6 against a fair value estimate of SEK468.93, appears significantly undervalued based on discounted cash flow analysis, suggesting over 44.9% potential upside. Despite this, its recent performance shows a dip in net income and EPS in the latest quarters compared to the previous year. However, earnings are projected to grow by 25.73% annually over the next three years, outstripping the Swedish market's growth forecast of 15.3%. This robust earnings growth outlook coupled with a strategic sales target of SEK 20 billion by 2027 underscores potential despite recent underwhelming profit figures and an unstable dividend track record.
Overview: Sweco AB (publ) offers architecture and engineering consultancy services globally, with a market capitalization of approximately SEK 61.14 billion.
Operations: Sweco's revenue is generated from various regional segments, with Sweden contributing SEK 8.74 billion, Norway SEK 3.50 billion, Belgium SEK 3.97 billion, Denmark SEK 3.24 billion, Finland SECk 3.67 billion, the Netherlands SEK 3.00 billion, and Germany & Central Europe providing SEK 2.71 billion.
Estimated Discount To Fair Value: 17.5%
Sweco, trading at SEK 169.90, is valued below its fair value of SEK 205.89, reflecting a modest undervaluation based on discounted cash flow analysis. Recent earnings show a solid increase with Q2 net income rising to SEK 540 million from SEK 357 million year-over-year and significant contracts like the SEK 400 million East Coast Line expansion enhancing future revenue prospects. While Sweco's earnings are expected to grow by 17.31% annually, surpassing the Swedish market's forecast of 15.3%, its dividend track record remains unstable, posing a caution for yield-focused investors.
This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.
Companies discussed in this article include OM:BILL OM:LIAB and OM:SWEC B.
