Why Schneider Electric S.E. (EPA:SU) Could Be Worth Watching

Let's talk about the popular Schneider Electric S.E. (EPA:SU). The company's shares received a lot of attention from a substantial price movement on the ENXTPA over the last few months, increasing to €162 at one point, and dropping to the lows of €139. 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 Schneider Electric's current trading price of €149 reflective of the actual value of the large-cap? Or is it currently undervalued, providing us with the opportunity to buy? Let’s take a look at Schneider Electric’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 Schneider Electric

What's The Opportunity In Schneider Electric?

The stock seems fairly valued at the moment according to my valuation model. It’s trading around 2.5% below my intrinsic value, which means if you buy Schneider Electric today, you’d be paying a reasonable price for it. And if you believe the company’s true value is €153.29, then there’s not much of an upside to gain from mispricing. In addition to this, Schneider Electric has a low beta, which suggests its share price is less volatile than the wider market.

Can we expect growth from Schneider Electric?

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. With profit expected to grow by 33% over the next couple of years, the future seems bright for Schneider Electric. It looks like higher cash flow is on the cards for the stock, which should feed into a higher share valuation.

What This Means For You

Are you a shareholder? SU’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 SU, now may not be the most optimal 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'd like to know more about Schneider Electric as a business, it's important to be aware of any risks it's facing. In terms of investment risks, we've identified 1 warning sign with Schneider Electric, and understanding this should be part of your investment process.

If you are no longer interested in Schneider Electric, 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.