At €15.98, Is Buzzi Unicem S.p.A. (BIT:BZU) Worth Looking At Closely?

Buzzi Unicem S.p.A. (BIT:BZU), might not be a large cap stock, but it saw significant share price movement during recent months on the BIT, rising to highs of €20.24 and falling to the lows of €15.55. 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 Buzzi Unicem's current trading price of €15.98 reflective of the actual value of the mid-cap? Or is it currently undervalued, providing us with the opportunity to buy? Let’s take a look at Buzzi Unicem’s outlook and value based on the most recent financial data to see if there are any catalysts for a price change.

See our latest analysis for Buzzi Unicem

Is Buzzi Unicem still cheap?

Good news, investors! Buzzi Unicem is still a bargain right now according to my price multiple model, which compares the company's price-to-earnings ratio to the industry average. In this instance, I’ve used the price-to-earnings (PE) ratio given that there is not enough information to reliably forecast the stock’s cash flows. I find that Buzzi Unicem’s ratio of 5.42x is below its peer average of 11.65x, which indicates the stock is trading at a lower price compared to the Basic Materials industry. What’s more interesting is that, Buzzi Unicem’s share price is quite volatile, which gives us more chances to buy since the share price could sink lower (or rise higher) in the future. 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.

What does the future of Buzzi Unicem look like?

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. Though in the case of Buzzi Unicem, it is expected to deliver a negative earnings growth of -0.7%, which doesn’t help build up its investment thesis. It appears that risk of future uncertainty is high, at least in the near term.

What this means for you:

Are you a shareholder? Although BZU is currently trading below the industry PE ratio, the adverse prospect of negative growth brings about some degree of risk. I recommend you think about whether you want to increase your portfolio exposure to BZU, or whether diversifying into another stock may be a better move for your total risk and return.

Are you a potential investor? If you’ve been keeping an eye on BZU for a while, but hesitant on making the leap, I recommend you dig deeper into the stock. Given its current price multiple, now is a great time to make a decision. But keep in mind the risks that come with negative growth prospects in the future.

If you'd like to know more about Buzzi Unicem as a business, it's important to be aware of any risks it's facing. While conducting our analysis, we found that Buzzi Unicem has 1 warning sign and it would be unwise to ignore this.

If you are no longer interested in Buzzi Unicem, 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.