When Should You Buy LANXESS Aktiengesellschaft (ETR:LXS)?

LANXESS Aktiengesellschaft (ETR:LXS), is not the largest company out there, but it received a lot of attention from a substantial price movement on the XTRA over the last few months, increasing to €34.67 at one point, and dropping to the lows of €26.34. 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 LANXESS' current trading price of €27.04 reflective of the actual value of the mid-cap? Or is it currently undervalued, providing us with the opportunity to buy? Let’s take a look at LANXESS’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 LANXESS

What's The Opportunity In LANXESS?

Good news, investors! LANXESS is still a bargain right now. My valuation model shows that the intrinsic value for the stock is €42.66, which is above what the market is valuing the company at the moment. This indicates a potential opportunity to buy low. However, given that LANXESS’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 kind of growth will LANXESS generate?

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. However, with a relatively muted revenue growth of 1.3% expected over the next couple of years, growth doesn’t seem like a key driver for a buy decision for LANXESS, at least in the short term.

What This Means For You

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

Are you a potential investor? If you’ve been keeping an eye on LXS 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 LXS. But before you make any investment decisions, consider other factors such as the track record of its management team, in order to make a well-informed buy.

If you want to dive deeper into LANXESS, you'd also look into what risks it is currently facing. Case in point: We've spotted 2 warning signs for LANXESS you should be aware of.

If you are no longer interested in LANXESS, 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.