Stock Analysis

Why Metsä Board Oyj (HEL:METSB) Could Be Worth Watching

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Metsä Board Oyj (HEL:METSB), is not the largest company out there, but it saw significant share price movement during recent months on the HLSE, rising to highs of €8.88 and falling to the lows of €7.97. 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 €8.25 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.

Check out 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 6.6% below my intrinsic value, which means if you buy Metsä Board Oyj today, you’d be paying a reasonable price for it. And if you believe that the stock is really worth €8.84, then there’s not much of an upside to gain from mispricing. 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?

HLSE:METSB Earnings and Revenue Growth March 15th 2023

Investors looking for growth in their portfolio may want to consider the prospects of a company before buying its shares. 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. Though in the case of Metsä Board Oyj, it is expected to deliver a negative earnings growth of -14%, 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? METSB seems fairly priced right now, but given the uncertainty from negative returns in the future, this could be the right time to reduce the risk in 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 an eye on METSB 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. 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.

So while earnings quality is important, it's equally important to consider the risks facing Metsä Board Oyj at this point in time. For example, we've found that Metsä Board Oyj has 3 warning signs (2 make us uncomfortable!) that deserve your attention before going any further with your analysis.

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