At €25.89, Is It Time To Put Rexel S.A. (EPA:RXL) On Your Watch List?

Rexel S.A. (EPA:RXL), is not the largest company out there, but it received a lot of attention from a substantial price increase on the ENXTPA over the last few months. The recent share price gains has brought the company back closer to its yearly peak. With many analysts covering the mid-cap stock, we may expect any price-sensitive announcements have already been factored into the stock’s share price. However, what if the stock is still a bargain? Let’s take a look at Rexel’s outlook and value based on the most recent financial data to see if the opportunity still exists.

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What Is Rexel Worth?

The stock seems fairly valued at the moment according to our valuation model. It’s trading around 8.92% above our intrinsic value, which means if you buy Rexel today, you’d be paying a relatively fair price for it. And if you believe the company’s true value is €23.77, there’s only an insignificant downside when the price falls to its real value. Is there another opportunity to buy low in the future? Since Rexel’s share price is quite volatile, we could potentially see it sink lower (or rise higher) in the future, giving us another chance to buy. This is based on its high beta, which is a good indicator for how much the stock moves relative to the rest of the market.

Check out our latest analysis for Rexel

What kind of growth will Rexel generate?

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. Rexel's earnings over the next few years are expected to double, indicating a very optimistic future ahead. This should lead to stronger cash flows, feeding into a higher share value.

What This Means For You

Are you a shareholder? It seems like the market has already priced in RXL’s positive outlook, 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 conviction to buy should the price fluctuates below the true value?

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

If you'd like to know more about Rexel as a business, it's important to be aware of any risks it's facing. In terms of investment risks, we've identified 4 warning signs with Rexel, and understanding these should be part of your investment process.

If you are no longer interested in Rexel, 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.