Is Siemens Aktiengesellschaft (ETR:SIE) Potentially Undervalued?

Let's talk about the popular Siemens Aktiengesellschaft (ETR:SIE). The company's shares received a lot of attention from a substantial price movement on the XTRA over the last few months, increasing to €166 at one point, and dropping to the lows of €134. 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 Siemens' current trading price of €135 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 Siemens’s outlook and value based on the most recent financial data to see if there are any catalysts for a price change.

View our latest analysis for Siemens

What Is Siemens Worth?

Good news, investors! Siemens is still a bargain right now. My valuation model shows that the intrinsic value for the stock is €206.72, but it is currently trading at €135 on the share market, meaning that there is still an opportunity to buy now. What’s more interesting is that, Siemens’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 Siemens 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 Siemens, it is expected to deliver a relatively unexciting earnings growth of 0.3%, which doesn’t help build up its investment thesis. Growth doesn’t appear to be a main reason for a buy decision for the company, at least in the near term.

What This Means For You

Are you a shareholder? Even though growth is relatively muted, since SIE is currently undervalued, it may be a great time to accumulate more of your holdings in the stock. However, there are also other factors such as capital structure to consider, which could explain the current undervaluation.

Are you a potential investor? If you’ve been keeping an eye on SIE for a while, now might be the time to make a leap. Its future outlook isn’t fully reflected in the current share price yet, which means it’s not too late to buy SIE. But before you make any investment decisions, consider other factors such as the strength of its balance sheet, in order to make a well-informed buy.

With this in mind, we wouldn't consider investing in a stock unless we had a thorough understanding of the risks. You'd be interested to know, that we found 1 warning sign for Siemens and you'll want to know about it.

If you are no longer interested in Siemens, 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.