At €152, Is It Time To Put HOCHTIEF Aktiengesellschaft (ETR:HOT) On Your Watch List?

HOCHTIEF Aktiengesellschaft (ETR:HOT) led the XTRA gainers with a relatively large price hike in the past couple of weeks. The recent jump in the share price has meant that the company is trading at close to its 52-week high. 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? Let’s examine HOCHTIEF’s valuation and outlook in more detail to determine if there’s still a bargain opportunity.

Check out our latest analysis for HOCHTIEF

What Is HOCHTIEF Worth?

The stock is currently trading at €152 on the share market, which means it is overvalued by 33% compared to our intrinsic value of €114.05. This means that the buying opportunity has probably disappeared for now. But, is there another opportunity to buy low in the future? Given that HOCHTIEF’s share is fairly volatile (i.e. its price movements are magnified relative to the rest of the market) this could mean the price can sink lower, giving us another chance to buy in the future. This is based on its high beta, which is a good indicator for share price volatility.

What does the future of HOCHTIEF 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. However, with a negative profit growth of -2.5% expected over the next couple of years, near-term growth certainly doesn’t appear to be a driver for a buy decision for HOCHTIEF. This certainty tips the risk-return scale towards higher risk.

What This Means For You

Are you a shareholder? If you believe HOT should trade below its current price, selling high and buying it back up again when its price falls towards its real value can be profitable. Given the uncertainty from negative growth in the future, this could be the right time to reduce your total portfolio risk. But before you make this decision, take a look at whether its fundamentals have changed.

Are you a potential investor? If you’ve been keeping an eye on HOT for a while, now may not be the best time to enter into the stock. you may want to reconsider buying the stock at this time. The company’s price has climbed passed its true value, in addition to a risky future outlook. However, there are also other important factors which we haven’t considered today, such as the financial strength of the company. Should the price fall in the future, will you be well-informed enough to buy?

So while earnings quality is important, it's equally important to consider the risks facing HOCHTIEF at this point in time. Be aware that HOCHTIEF is showing 4 warning signs in our investment analysis and 2 of those are significant...

If you are no longer interested in HOCHTIEF, 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.