Why Wienerberger AG (VIE:WIE) Could Be Worth Watching

While Wienerberger AG (VIE:WIE) might not be the most widely known stock at the moment, it received a lot of attention from a substantial price increase on the WBAG over the last few months. 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 Wienerberger’s outlook and value based on the most recent financial data to see if the opportunity still exists.

See our latest analysis for Wienerberger

What's The Opportunity In Wienerberger?

Great news for investors – Wienerberger is still trading at a fairly cheap price 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 5.5x is currently well-below the industry average of 10.78x, meaning that it is trading at a cheaper price relative to its peers. What’s more interesting is that, Wienerberger’s share price is quite volatile, which gives us more chances to buy since the share price could sink lower (or rise higher) in the future. This is based on its high beta, which is a good indicator for how much the stock moves relative to the rest of the market.

What does the future of Wienerberger 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. However, with an extremely negative double-digit change in profit expected over the next couple of years, near-term growth is certainly not a driver of a buy decision. It seems like high uncertainty is on the cards for Wienerberger, at least in the near future.

What This Means For You

Are you a shareholder? Although WIE is currently trading below the industry PE ratio, the negative profit outlook does bring on some uncertainty, which equates to higher risk. Consider whether you want to increase your portfolio exposure to WIE, or whether diversifying into another stock may be a better move for your total risk and return.

Are you a potential investor? If you’ve been keeping tabs on WIE for some time, but hesitant on making the leap, I recommend you research further into the stock. Given its current price multiple, now is a great time to make a decision. But keep in mind the risks that come with negative growth prospects in the future.

If you'd like to know more about Wienerberger as a business, it's important to be aware of any risks it's facing. While conducting our analysis, we found that Wienerberger has 1 warning sign and it would be unwise to ignore it.

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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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an 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 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.