Stock Analysis

Is Now An Opportune Moment To Examine Wienerberger AG (VIE:WIE)?

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WBAG:WIE
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While Wienerberger AG (VIE:WIE) might not be the most widely known stock at the moment, it saw a double-digit share price rise of over 10% in the past couple of months on the WBAG. As a mid-cap stock with high coverage by analysts, you could assume any recent changes in the company’s outlook is already priced into the stock. But what if there is still an opportunity to buy? Let’s examine Wienerberger’s valuation and outlook in more detail to determine if there’s still a bargain opportunity.

View our latest analysis for Wienerberger

What Is Wienerberger Worth?

The share price seems sensible at the moment according to my price multiple model, where I compare the company's price-to-earnings ratio to the industry average. I’ve used the price-to-earnings ratio in this instance because there’s not enough visibility to forecast its cash flows. The stock’s ratio of 7.03x is currently trading in-line with its industry peers’ ratio, which means if you buy Wienerberger today, you’d be paying a relatively reasonable price for it. Although, there may be an opportunity to buy in the future. This is because Wienerberger’s beta (a measure of share price volatility) is high, meaning 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 by more than the rest of the market, providing a prime buying opportunity.

What does the future of Wienerberger look like?

earnings-and-revenue-growth
WBAG:WIE Earnings and Revenue Growth November 29th 2023

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. Wienerberger'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? It seems like the market has already priced in WIE’s positive outlook, with shares trading around industry price multiples. However, there are also other important factors which we haven’t considered today, such as the track record of its management team. Have these factors changed since the last time you looked at WIE? Will you have enough confidence to invest in the company should the price drop below the industry PE ratio?

Are you a potential investor? If you’ve been keeping tabs on WIE, now may not be the most optimal time to buy, given it is trading around industry price multiples. However, the positive outlook is encouraging for WIE, which means it’s worth diving deeper into other factors such as the strength of its balance sheet, in order to take advantage of the next price drop.

If you want to dive deeper into Wienerberger, you'd also look into what risks it is currently facing. Every company has risks, and we've spotted 2 warning signs for Wienerberger you should know about.

If you are no longer interested in Wienerberger, you can use our free platform to see our list of over 50 other stocks with a high growth potential.

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