Now is a good time to review Fresenius SE & Co. KGaA (ETR: FRE)?
Let’s talk about the popular Fresenius SE & Co. KGaA (ETR: FRE). The company’s shares have seen significant price movements over the past few months on the XTRA, hitting highs of € 41.40 and falling to lows of € 33.45. Certain movements in stock prices can give investors a better opportunity to get into the stock and potentially buy at a lower price. A question to be answered is whether the current price of € 36.68 of Fresenius SE KGaA reflects the real value of the large cap? Or is it currently undervalued, giving us the opportunity to buy? Let’s take a look at the outlook and value of Fresenius SE KGaA based on the most recent financial data to see if there are any catalysts for a price change.
See our latest review for Fresenius SE KGaA
What is the opportunity for Fresenius SE KGaA?
Great news for investors – Fresenius SE KGaA is still trading fairly low under my multiple price model, where I compare the company’s price-to-earnings ratio to the industry average. I used the price / earnings ratio in this case because there is not enough visibility to forecast its cash flow. The stock’s ratio of 11.85x is currently well below the industry average of 19.33x, meaning it is trading below its peers. However, there may be another chance to buy again in the future. This is because Fresenius SE KGaA’s beta (a measure of stock price volatility) is high, which means its price movements will be exaggerated relative to the rest of the market. If the market is bearish, the company’s shares will likely fall more than the rest of the market, providing a prime buying opportunity.
Can we expect growth from Fresenius SE KGaA?
Investors looking for growth in their portfolio may want to consider a company’s prospects before buying its shares. Buying a large business with a solid outlook for a cheap price is always a good investment, so let’s also take a look at the future expectations of the business. Fresenius SE KGaA’s profits over the next few years are expected to increase by 38%, indicating a very optimistic future. This should lead to more robust cash flow, fueling a higher value of the stock.
What this means for you:
Are you a shareholder? With FRE currently below the industry’s PE ratio, maybe now is the time to increase your holdings of stocks. With an optimistic outlook on the horizon, it appears that this growth has not yet been fully reflected in the share price. However, there are also other factors such as the capital structure to take into account, which could explain the current price multiple.
Are you a potential investor? If you’ve been keeping your eye on FRE for a while, now might be the time to take a leap. Its optimistic future earnings outlook is not yet fully reflected in the current share price, which means it is not too late to buy FRE. But before making any investment decision, consider other factors such as the track record of its management team, in order to make a well-informed assessment.
In light of this, if you want to do more analysis on the business, it is essential to be aware of the risks involved. At Simply Wall St, we found 1 warning sign for Fresenius SE KGaA and we think they deserve your attention.
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This Simply Wall St article is general in nature. We provide commentary based on historical data and analyst forecasts using only 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 into account your goals or your financial situation. Our aim is to bring you long-term, targeted analysis based on fundamental data. Note that our analysis may not take into account the latest announcements from price sensitive companies or qualitative documents. Simply Wall St has no position in any of the stocks mentioned.