At €8.29, Is Metsä Board Oyj (HEL:METSB) Worth Looking At Closely?

Metsä Board Oyj (HEL:METSB), might not be a large cap stock, but it received a lot of attention from a substantial price movement on the HLSE over the last few months, increasing to €9.42 at one point, and dropping to the lows of €7.84. 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 Metsä Board Oyj's current trading price of €8.29 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 Metsä Board 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 Metsä Board Oyj

Is Metsä Board Oyj still cheap?

The stock seems fairly valued at the moment according to my valuation model. It’s trading around 1.0% below my intrinsic value, which means if you buy Metsä Board Oyj today, you’d be paying a fair price for it. And if you believe that the stock is really worth €8.37, then there isn’t much room for the share price grow beyond what it’s currently trading. In addition to this, Metsä Board Oyj has a low beta, which suggests its share price is less volatile than the wider market.

Can we expect growth from Metsä Board Oyj?

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. However, with a negative profit growth of -17% expected over the next couple of years, near-term growth certainly doesn’t appear to be a driver for a buy decision for Metsä Board Oyj. This certainty tips the risk-return scale towards higher risk.

What this means for you:

Are you a shareholder? Currently, METSB appears to be trading around its fair value, 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 an eye on METSB 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. In addition to this, 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 METSB should the price fluctuate below its true value.

With this in mind, we wouldn't consider investing in a stock unless we had a thorough understanding of the risks. For instance, we've identified 2 warning signs for Metsä Board Oyj (1 doesn't sit too well with us) you should be familiar with.

If you are no longer interested in Metsä Board Oyj, you can use our free platform to see our list of over 50 other stocks with a high growth potential.

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.

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