Is It Time To Consider Buying Ferrovial SE (BME:FER)?

Today we're going to take a look at the well-established Ferrovial SE (BME:FER). The company's stock saw its share price hover around a small range of €43.49 to €47.57 over the last few weeks. But is this actually reflective of the share value of the large-cap? Or is it currently undervalued, providing us with the opportunity to buy? Let’s take a look at Ferrovial’s outlook and value based on the most recent financial data to see if there are any catalysts for a price change.

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What Is Ferrovial Worth?

According to our valuation model, Ferrovial seems to be fairly priced at around 14.15% above our intrinsic value, which means if you buy Ferrovial today, you’d be paying a relatively fair price for it. And if you believe the company’s true value is €41.14, there’s only an insignificant downside when the price falls to its real value. Furthermore, Ferrovial’s low beta implies that the stock is less volatile than the wider market.

See our latest analysis for Ferrovial

Can we expect growth from Ferrovial?

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 Ferrovial, it is expected to deliver a highly negative earnings growth in the next few years, which doesn’t help build up its investment thesis. It appears that risk of future uncertainty is high, at least in the near term.

What This Means For You

Are you a shareholder? FER seems fairly priced right now, but given the uncertainty from negative returns in the future, this could be the right time to de-risk your portfolio. Is your current exposure to the stock optimal for your total portfolio? And is the opportunity cost of holding a negative-outlook stock too high? Before you make a decision on the stock, take a look at whether its fundamentals have changed.

Are you a potential investor? If you’ve been keeping tabs on FER for a while, now may not be the most advantageous time to buy, given it is trading around its fair value. The price seems to be trading at fair value, which means there’s less benefit from mispricing. Furthermore, the negative growth outlook increases the risk of holding the stock. However, there are also other important factors we haven’t considered today, which can help gel your views on FER should the price fluctuate below its true value.

If you want to dive deeper into Ferrovial, you'd also look into what risks it is currently facing. When we did our research, we found 3 warning signs for Ferrovial (2 are significant!) that we believe deserve your full attention.

If you are no longer interested in Ferrovial, 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.