At €5.95, Is Enel SpA (BIT:ENEL) Worth Looking At Closely?

Today we're going to take a look at the well-established Enel SpA (BIT:ENEL). The company's stock maintained its current share price over the past couple of month on the BIT, with a relatively tight range of €5.88 to €6.34. However, does this price actually reflect the true value of the large-cap? Or is it currently undervalued, providing us with the opportunity to buy? Let’s take a look at Enel’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 Enel

What Is Enel Worth?

The stock seems fairly valued at the moment according to my valuation model. It’s trading around 11.35% above my intrinsic value, which means if you buy Enel today, you’d be paying a relatively reasonable price for it. And if you believe the company’s true value is €5.34, then there isn’t really any room for the share price grow beyond what it’s currently trading. Furthermore, Enel’s low beta implies that the stock is less volatile than the wider market.

What kind of growth will Enel 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. Enel's earnings over the next few years are expected to increase by 70%, indicating a highly optimistic future ahead. This should lead to more robust cash flows, feeding into a higher share value.

What This Means For You

Are you a shareholder? ENEL’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 financial strength of the company. 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 an eye on ENEL, 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 further examining other factors such as the strength of its balance sheet, in order to take advantage of the next price drop.

So if you'd like to dive deeper into this stock, it's crucial to consider any risks it's facing. Our analysis shows 2 warning signs for Enel (1 can't be ignored!) and we strongly recommend you look at these before investing.

If you are no longer interested in Enel, 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.