What Does Deutsche Post AG's (ETR:DPW) Share Price Indicate?

By
Simply Wall St
Published
October 22, 2021
XTRA:DPW
Source: Shutterstock

Let's talk about the popular Deutsche Post AG (ETR:DPW). The company's shares saw significant share price movement during recent months on the XTRA, rising to highs of €60.87 and falling to the lows of €52.19. 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 Deutsche Post's current trading price of €53.60 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 Deutsche Post’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 Deutsche Post

What is Deutsche Post worth?

Good news, investors! Deutsche Post is still a bargain right now. My valuation model shows that the intrinsic value for the stock is €85.11, which is above what the market is valuing the company at the moment. This indicates a potential opportunity to buy low. Although, there may be another chance to buy again in the future. This is because Deutsche Post’s beta (a measure of share price volatility) is high, meaning its price movements will be exaggerated relative to the rest of the market. If the market is bearish, the company's shares will likely fall by more than the rest of the market, providing a prime buying opportunity.

What kind of growth will Deutsche Post generate?

earnings-and-revenue-growth
XTRA:DPW Earnings and Revenue Growth October 23rd 2021

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 a double-digit 13% over the next couple of years, the outlook is positive for Deutsche Post. 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? Since DPW is currently undervalued, it may be a great time to increase your holdings in the stock. With a positive outlook on the horizon, it seems like this growth has not yet been fully factored into the share price. 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 DPW for a while, now might be the time to make a leap. Its prosperous future outlook isn’t fully reflected in the current share price yet, which means it’s not too late to buy DPW. 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 investment decision.

If you want to dive deeper into Deutsche Post, you'd also look into what risks it is currently facing. Every company has risks, and we've spotted 1 warning sign for Deutsche Post you should know about.

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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