At €111, Is It Time To Put Vinci SA (EPA:DG) On Your Watch List?

Vinci SA (EPA:DG) maintained its current share price over the past couple of month on the ENXTPA, with a relatively tight range of €110 to €120. 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 Vinci’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 Vinci

What Is Vinci Worth?

According to our valuation model, Vinci seems to be fairly priced at around 19% below our intrinsic value, which means if you buy Vinci today, you’d be paying a reasonable price for it. And if you believe that the stock is really worth €136.38, then there isn’t much room for the share price grow beyond what it’s currently trading. Furthermore, Vinci’s low beta implies that the stock is less volatile than the wider market.

What kind of growth will Vinci generate?

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. Vinci's earnings growth are expected to be in the teens in the upcoming years, indicating a solid future ahead. This should lead to robust cash flows, feeding into a higher share value.

What This Means For You

Are you a shareholder? DG’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 DG, 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.

So if you'd like to dive deeper into this stock, it's crucial to consider any risks it's facing. In terms of investment risks, we've identified 2 warning signs with Vinci, and understanding them should be part of your investment process.

If you are no longer interested in Vinci, 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.