Why Naturgy Energy Group, S.A. (BME:NTGY) Could Be Worth Watching

Today we're going to take a look at the well-established Naturgy Energy Group, S.A. (BME:NTGY). The company's stock saw a decent share price growth in the teens level on the BME over the last few months. As a large-cap stock with high coverage by analysts, you could assume any recent changes in the company’s outlook is already priced into the stock. However, could the stock still be trading at a relatively cheap price? Let’s take a look at Naturgy Energy Group’s outlook and value based on the most recent financial data to see if the opportunity still exists.

See our latest analysis for Naturgy Energy Group

Is Naturgy Energy Group still cheap?

Good news, investors! Naturgy Energy Group is still a bargain right now. According to my valuation, the intrinsic value for the stock is €23.48, which is above what the market is valuing the company at the moment. This indicates a potential opportunity to buy low. Naturgy Energy 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 Naturgy Energy Group look like?

Investors looking for growth in their portfolio may want to consider the prospects of a company before buying its shares. 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. Naturgy Energy Group’s earnings growth are expected to be in the teens in the upcoming years, indicating a solid future ahead. This should lead to robust cash flows, feeding into a higher share value.

What this means for you:

Are you a shareholder? Since NTGY 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 NTGY for a while, now might be the time to enter the stock. Its buoyant future outlook isn’t fully reflected in the current share price yet, which means it’s not too late to buy NTGY. But before you make any investment decisions, consider other factors such as the strength of its balance sheet, in order to make a well-informed buy.

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

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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. 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.
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