Should You Think About Buying UPM-Kymmene Oyj (HEL:UPM) Now?

Let's talk about the popular UPM-Kymmene Oyj (HEL:UPM). The company's shares maintained its current share price over the past couple of month on the HLSE, with a relatively tight range of €30.56 to €33.28. However, does this price actually reflect the true value of the large-cap? Or is it currently undervalued, providing us with the opportunity to buy? Let’s take a look at UPM-Kymmene Oyj’s outlook and value based on the most recent financial data to see if there are any catalysts for a price change.

View our latest analysis for UPM-Kymmene Oyj

What is UPM-Kymmene Oyj worth?

According to my valuation model, UPM-Kymmene Oyj seems to be fairly priced at around 1.2% below my intrinsic value, which means if you buy UPM-Kymmene Oyj today, you’d be paying a fair price for it. And if you believe the company’s true value is €32.24, then there’s not much of an upside to gain from mispricing. In addition to this, UPM-Kymmene Oyj has a low beta, which suggests its share price is less volatile than the wider market.

Can we expect growth from UPM-Kymmene Oyj?

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. 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. UPM-Kymmene Oyj's earnings over the next few years are expected to increase by 90%, indicating a highly optimistic future ahead. This should lead to more robust cash flows, feeding into a higher share value.

What this means for you:

Are you a shareholder? UPM’s optimistic future growth appears to have been factored into the current share price, with shares trading around its fair value. However, there are also other important factors which we haven’t considered today, such as the track record of its management team. Have these factors changed since the last time you looked at the stock? Will you have enough confidence to invest in the company should the price drop below its fair value?

Are you a potential investor? If you’ve been keeping tabs on UPM, now may not be the most advantageous time to buy, given it is trading around its fair value. However, the optimistic prospect is encouraging for the company, which means it’s worth further examining other factors such as the strength of its balance sheet, in order to take advantage of the next price drop.

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

If you are no longer interested in UPM-Kymmene 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. 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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