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While Burberry Group plc (LON:BRBY) might not have the largest market cap around , it saw a significant share price rise of 49% in the past couple of months on the LSE. While good news for shareholders, the company has traded much higher in the past year. With many analysts covering the mid-cap stock, we may expect any price-sensitive announcements have already been factored into the stock’s share price. But what if there is still an opportunity to buy? Let’s take a look at Burberry Group’s outlook and value based on the most recent financial data to see if the opportunity still exists.
View our latest analysis for Burberry Group
What's The Opportunity In Burberry Group?
Great news for investors – Burberry Group is still trading at a fairly cheap price. Our valuation model shows that the intrinsic value for the stock is £14.08, but it is currently trading at UK£9.62 on the share market, meaning that there is still an opportunity to buy now. Burberry Group’s share price also seems relatively stable compared to the rest of the market, as indicated by its low beta. If you believe the share price should eventually reach its true value, a low beta could suggest it is unlikely to rapidly do so anytime soon, and once it’s there, it may be hard to fall back down into an attractive buying range.
What does the future of Burberry Group 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. Although value investors would argue that it’s the intrinsic value relative to the price that matter the most, a more compelling investment thesis would be high growth potential at a cheap price. Burberry Group'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 BRBY is currently undervalued, it may be a great time to increase 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 BRBY for a while, now might be the time to enter the stock. Its prosperous future outlook isn’t fully reflected in the current share price yet, which means it’s not too late to buy BRBY. 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.