Should You Investigate Compagnie Financière Richemont SA (VTX:CFR) At CHF142?

Compagnie Financière Richemont SA (VTX:CFR) received a lot of attention from a substantial price movement on the SWX over the last few months, increasing to CHF156 at one point, and dropping to the lows of CHF138. 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 Compagnie Financière Richemont's current trading price of CHF142 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 Compagnie Financière Richemont’s outlook and value based on the most recent financial data to see if there are any catalysts for a price change.

Check out our latest analysis for Compagnie Financière Richemont

What Is Compagnie Financière Richemont Worth?

According to my valuation model, Compagnie Financière Richemont seems to be fairly priced at around 18.26% above my intrinsic value, which means if you buy Compagnie Financière Richemont today, you’d be paying a relatively fair price for it. And if you believe that the stock is really worth CHF119.70, there’s only an insignificant downside when the price falls to its real value. Is there another opportunity to buy low in the future? Since Compagnie Financière Richemont’s share price is quite volatile, we could potentially see it sink lower (or rise higher) in the future, giving us another chance to buy. 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 Compagnie Financière Richemont look like?

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. With profit expected to grow by 29% over the next couple of years, the future seems bright for Compagnie Financière Richemont. 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? It seems like the market has already priced in CFR’s positive outlook, with shares trading around its fair value. However, there are also other important factors which we haven’t considered today, such as the financial strength of the company. Have these factors changed since the last time you looked at the stock? Will you have enough confidence to invest in the company should the price drop below its fair value?

Are you a potential investor? If you’ve been keeping an eye on CFR, 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 diving deeper into other factors such as the strength of its balance sheet, in order to take advantage of the next price drop.

With this in mind, we wouldn't consider investing in a stock unless we had a thorough understanding of the risks. At Simply Wall St, we found 2 warning signs for Compagnie Financière Richemont and we think they deserve your attention.

If you are no longer interested in Compagnie Financière Richemont, 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.