Is Now An Opportune Moment To Examine Suzano S.A. (BVMF:SUZB3)?

Suzano S.A. (BVMF:SUZB3) received a lot of attention from a substantial price movement on the BOVESPA over the last few months, increasing to R$64.25 at one point, and dropping to the lows of R$48.75. Some share price movements can give investors a better opportunity to enter into the stock, and potentially buy at a lower price. A question to answer is whether Suzano's current trading price of R$51.35 reflective of the actual value of the large-cap? Or is it currently undervalued, providing us with the opportunity to buy? Let’s take a look at Suzano’s outlook and value based on the most recent financial data to see if there are any catalysts for a price change.

See our latest analysis for Suzano

What's the opportunity in Suzano?

According to my valuation model, Suzano seems to be fairly priced at around 17.36% above my intrinsic value, which means if you buy Suzano today, you’d be paying a relatively fair price for it. And if you believe that the stock is really worth R$43.75, there’s only an insignificant downside when the price falls to its real value. Furthermore, Suzano’s low beta implies that the stock is less volatile than the wider market.

What does the future of Suzano look like?

Investors looking for growth in their portfolio may want to consider the prospects of a company before buying its shares. 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 Suzano, it is expected to deliver a highly negative earnings growth in the next few years, which doesn’t help build up its investment thesis. It appears that risk of future uncertainty is high, at least in the near term.

What this means for you:

Are you a shareholder? SUZB3 seems fairly priced right now, but given the uncertainty from negative returns in the future, this could be the right time to de-risk your portfolio. Is your current exposure to the stock beneficial for your total portfolio? And is the opportunity cost of holding a negative-outlook stock too high? Before you make a decision on the stock, take a look at whether its fundamentals have changed.

Are you a potential investor? If you’ve been keeping tabs on SUZB3 for a while, now may not be the most optimal time to buy, given it is trading around its fair value. The stock appears to be trading at fair value, which means there’s less benefit from mispricing. Furthermore, the negative growth outlook increases the risk of holding the stock. However, there are also other important factors we haven’t considered today, which can help crystalize your views on SUZB3 should the price fluctuate below its true value.

If you want to dive deeper into Suzano, you'd also look into what risks it is currently facing. For instance, we've identified 4 warning signs for Suzano (1 is concerning) you should be familiar with.

If you are no longer interested in Suzano, 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.