Is Kemira Oyj (HEL:KEMIRA) Potentially Undervalued?

While Kemira Oyj (HEL:KEMIRA) might not be the most widely known stock at the moment, it saw significant share price movement during recent months on the HLSE, rising to highs of €17.05 and falling to the lows of €13.84. 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 Kemira Oyj's current trading price of €13.93 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 Kemira Oyj’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 Kemira Oyj

What's The Opportunity In Kemira Oyj?

According to my valuation model, Kemira Oyj seems to be fairly priced at around 17% below my intrinsic value, which means if you buy Kemira Oyj today, you’d be paying a reasonable price for it. And if you believe the company’s true value is €16.69, then there’s not much of an upside to gain from mispricing. Furthermore, Kemira Oyj’s low beta implies that the stock is less volatile than the wider market.

What does the future of Kemira Oyj look like?

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 an extremely negative double-digit change in profit expected over the next couple of years, near-term growth is certainly not a driver of a buy decision. It seems like high uncertainty is on the cards for Kemira Oyj, at least in the near future.

What This Means For You

Are you a shareholder? KEMIRA 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 beneficial 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 KEMIRA for a while, now may not be the most optimal time to buy, given it is trading around its fair value. The stock appears 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 KEMIRA should the price fluctuate below its true value.

If you want to dive deeper into Kemira Oyj, you'd also look into what risks it is currently facing. While conducting our analysis, we found that Kemira Oyj has 1 warning sign and it would be unwise to ignore it.

If you are no longer interested in Kemira Oyj, 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.