Mitchells & Butlers plc (LON:MAB), which is in the hospitality business, and is based in United Kingdom, maintained its current share price over the past couple of month on the LSE, with a relatively tight range of £2.41 to £2.65. However, does this price actually reflect the true value of the small-cap? Or is it currently undervalued, providing us with the opportunity to buy? Let’s take a look at Mitchells & Butlers’s outlook and value based on the most recent financial data to see if there are any catalysts for a price change.

See our latest analysis for Mitchells & Butlers

Is Mitchells & Butlers still cheap?

Great news for investors – Mitchells & Butlers is still trading at a fairly cheap price. According to my valuation, the intrinsic value for the stock is £4.93, but it is currently trading at UK£2.65 on the share market, meaning that there is still an opportunity to buy now. However, given that Mitchells & Butlers’s share is fairly volatile (i.e. its price movements are magnified relative to the rest of the market) this could mean the price can sink lower, giving us another chance to buy in the future. This is based on its high beta, which is a good indicator for share price volatility.

What does the future of Mitchells & Butlers 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. Mitchells & Butlers’s earnings over the next few years are expected to double, indicating a very optimistic future ahead. This should lead to stronger cash flows, feeding into a higher share value.

What this means for you:

Are you a shareholder? Since MAB is currently undervalued, it may be a great time to accumulate more of your holdings in the stock. With a positive outlook on the horizon, it seems like this growth has not yet been fully factored into the share price. 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 MAB for a while, now might be the time to make a leap. Its prosperous future outlook isn’t fully reflected in the current share price yet, which means it’s not too late to buy MAB. 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 buy.