At €6.29, Is It Time To Put Aegean Airlines S.A. (ATH:AEGN) On Your Watch List?

Aegean Airlines S.A. (ATH:AEGN), might not be a large cap stock, but it received a lot of attention from a substantial price increase on the ATSE over the last few months. Less-covered, small caps sees more of an opportunity for mispricing due to the lack of information available to the public, which can be a good thing. So, could the stock still be trading at a low price relative to its actual value? Today I will analyse the most recent data on Aegean Airlines’s outlook and valuation to see if the opportunity still exists.

See our latest analysis for Aegean Airlines

What's The Opportunity In Aegean Airlines?

According to my valuation model, the stock is currently overvalued by about 34%, trading at €6.29 compared to my intrinsic value of €4.68. This means that the buying opportunity has probably disappeared for now. But, is there another opportunity to buy low in the future? Given that Aegean Airlines’s share is fairly volatile (i.e. its price movements are magnified relative to the rest of the market) this could mean the price can sink lower, giving us another chance to buy in the future. This is based on its high beta, which is a good indicator for share price volatility.

What kind of growth will Aegean Airlines 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. 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 a double-digit 15% over the next couple of years, the outlook is positive for Aegean Airlines. 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? It seems like the market has well and truly priced in AEGN’s positive outlook, with shares trading above its fair value. However, this brings up another question – is now the right time to sell? If you believe AEGN should trade below its current price, selling high and buying it back up again when its price falls towards its real value can be profitable. But before you make this decision, take a look at whether its fundamentals have changed.

Are you a potential investor? If you’ve been keeping an eye on AEGN for a while, now may not be the best time to enter into the stock. The price has surpassed its true value, which means there’s no upside from mispricing. However, the positive outlook is encouraging for AEGN, which means it’s worth diving deeper into other factors in order to take advantage of the next price drop.

It can be quite valuable to consider what analysts expect for Aegean Airlines from their most recent forecasts. So feel free to check out our free graph representing analyst forecasts.

If you are no longer interested in Aegean Airlines, 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.