Geely Automobile (SEHK:175) Valuation Check After Launching a 10% Share Buyback Program

Geely Automobile Holdings (SEHK:175) has kicked off a sizable share buyback, with approval to repurchase up to 10% of its stock. This move can tighten supply and lift per share metrics over time.

See our latest analysis for Geely Automobile Holdings.

The buyback kicks in as the share price sits at HK$16.96, with a solid year to date share price return of around 20% but a softer 1 year total shareholder return of 12.8%. This suggests momentum is firming but not euphoric.

If you like Geely’s shareholder friendly move and want to see what else is revving up in the sector, explore other auto manufacturers through auto manufacturers.

With earnings still growing double digits and the stock trading at a steep discount to analyst targets and intrinsic value estimates, investors now face a key question: is this a genuine buying opportunity, or is the market already pricing in future growth?

Most Popular Narrative Narrative: 35.7% Undervalued

With the narrative fair value sitting well above Geely Automobile Holdings last close, the gap points to a market still discounting its future ramp up.

The analysts have a consensus price target of HK$26.275 for Geely Automobile Holdings based on their expectations of its future earnings growth, profit margins and other risk factors. However, there is a degree of disagreement amongst analysts, with the most bullish reporting a price target of HK$42.17, and the most bearish reporting a price target of just HK$20.07.

Read the complete narrative.

If you want to see what kind of revenue climb and margin reset could justify that jump in value, along with a richer earnings multiple than today, you can review the full narrative.

Result: Fair Value of $26.38 (UNDERVALUED)

Have a read of the narrative in full and understand what's behind the forecasts.

However, investors should watch for rising NEV competition and execution risks around integrating Zeekr and Lynk & Co, which could squeeze margins and delay upside.

Find out about the key risks to this Geely Automobile Holdings narrative.

Build Your Own Geely Automobile Holdings Narrative

If this perspective does not quite fit your view, or you prefer to dig into the numbers yourself, you can build a custom narrative in just a few minutes: Do it your way.

A good starting point is our analysis highlighting 4 key rewards investors are optimistic about regarding Geely Automobile Holdings.

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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.

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