Is Nutrien Ltd. (TSE:NTR) Potentially Undervalued?

Today we're going to take a look at the well-established Nutrien Ltd. (TSE:NTR). The company's stock saw a double-digit share price rise of over 10% in the past couple of months on the TSX. Shareholders may appreciate the recent price jump, but the company still has a way to go before reaching its yearly highs again. 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? Today we will analyse the most recent data on Nutrien’s outlook and valuation to see if the opportunity still exists.

Check out our latest analysis for Nutrien

Is Nutrien Still Cheap?

The stock seems fairly valued at the moment according to our valuation model. It’s trading around 16% below our intrinsic value, which means if you buy Nutrien today, you’d be paying a reasonable price for it. And if you believe the company’s true value is CA$88.84, then there’s not much of an upside to gain from mispricing. What's more, Nutrien’s share price may be more stable over time (relative to the market), as indicated by its low beta.

Can we expect growth from Nutrien?

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. 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. With profit expected to grow by 89% over the next couple of years, the future seems bright for Nutrien. It looks like higher cash flow is on the cards for the stock, which should feed into a higher share valuation.

What This Means For You

Are you a shareholder? NTR’s optimistic future growth appears to have been factored into the current share price, with shares trading around its fair value. 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 the stock? Will you have enough conviction to buy should the price fluctuates below the true value?

Are you a potential investor? If you’ve been keeping an eye on NTR, now may not be the most advantageous time to buy, given it is trading around its fair value. However, the positive outlook is encouraging for the company, which means it’s worth further examining 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 Nutrien, you'd also look into what risks it is currently facing. You'd be interested to know, that we found 4 warning signs for Nutrien and you'll want to know about these.

If you are no longer interested in Nutrien, 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.