Is It Time To Consider Buying Deutsche Post AG (ETR:DPW)?

Deutsche Post AG (ETR:DPW) had a relatively subdued couple of weeks in terms of changes in share price, which continued to float around the range of €40.75 to €44.23. However, is this the true valuation level of the large-cap? Or is it currently undervalued, providing us with the opportunity to buy? Let’s take a look at Deutsche Post’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 Deutsche Post

Is Deutsche Post Still Cheap?

Great news for investors – Deutsche Post is still trading at a fairly cheap price. My valuation model shows that the intrinsic value for the stock is €58.45, which is above what the market is valuing the company at the moment. This indicates a potential opportunity to buy low. However, given that Deutsche Post’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 Deutsche Post 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. 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. However, with a negative profit growth of -0.4% expected over the next couple of years, near-term growth certainly doesn’t appear to be a driver for a buy decision for Deutsche Post. This certainty tips the risk-return scale towards higher risk.

What This Means For You

Are you a shareholder? Although DPW is currently undervalued, the adverse prospect of negative growth brings about some degree of risk. Consider whether you want to increase your portfolio exposure to DPW, or whether diversifying into another stock may be a better move for your total risk and return.

Are you a potential investor? If you’ve been keeping an eye on DPW for a while, but hesitant on making the leap, I recommend you dig deeper into the stock. Given its current undervaluation, now is a great time to make a decision. But keep in mind the risks that come with negative growth prospects in the future.

Keep in mind, when it comes to analysing a stock it's worth noting the risks involved. While conducting our analysis, we found that Deutsche Post has 1 warning sign and it would be unwise to ignore this.

If you are no longer interested in Deutsche Post, 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.