Is ING Groep N.V. (AMS:INGA) Potentially Undervalued?

ING Groep N.V. (AMS:INGA) saw a significant share price rise of over 20% in the past couple of months on the ENXTAM. With many analysts covering the large-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 ING Groep’s outlook and value based on the most recent financial data to see if the opportunity still exists.

See our latest analysis for ING Groep

Is ING Groep still cheap?

Good news, investors! ING Groep is still a bargain right now. According to my valuation, the intrinsic value for the stock is €9.10, but it is currently trading at €5.41 on the share market, meaning that there is still an opportunity to buy now. However, given that ING Groep’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 kind of growth will ING Groep generate?

ENXTAM:INGA Past and Future Earnings April 13th 2020
ENXTAM:INGA Past and Future Earnings April 13th 2020

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. Though in the case of ING Groep, it is expected to deliver a relatively unexciting earnings growth of 2.1%, which doesn’t help build up its investment thesis. Growth doesn’t appear to be a main reason for a buy decision for the company, at least in the near term.

What this means for you:

Are you a shareholder? Even though growth is relatively muted, since INGA is currently undervalued, it may be a great time to increase your holdings in the stock. However, there are also other factors such as financial health to consider, which could explain the current undervaluation.

Are you a potential investor? If you’ve been keeping an eye on INGA for a while, now might be the time to enter the stock. Its future outlook isn’t fully reflected in the current share price yet, which means it’s not too late to buy INGA. 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 investment decision.

Price is just the tip of the iceberg. Dig deeper into what truly matters – the fundamentals – before you make a decision on ING Groep. You can find everything you need to know about ING Groep in the latest infographic research report. If you are no longer interested in ING Groep, you can use our free platform to see my list of over 50 other stocks with a high growth potential.

If you spot an error that warrants correction, please contact the editor at editorial-team@simplywallst.com. This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. Simply Wall St has no position in the stocks mentioned.

We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Thank you for reading.