Is Now An Opportune Moment To Examine TOTO LTD. (TSE:5332)?

TOTO LTD. (TSE:5332), is not the largest company out there, but it saw a decent share price growth of 16% on the TSE over the last few months. Shareholders may appreciate the recent price jump, but the company still has a way to go before reaching its yearly highs again. As a mid-cap stock with high coverage by analysts, you could assume any recent changes in the company’s outlook is already priced into the stock. However, what if the stock is still a bargain? Let’s take a look at TOTO’s outlook and value based on the most recent financial data to see if the opportunity still exists.

Check out our latest analysis for TOTO

What's The Opportunity In TOTO?

According to our valuation model, TOTO seems to be fairly priced at around 9.7% below our intrinsic value, which means if you buy TOTO today, you’d be paying a reasonable price for it. And if you believe that the stock is really worth ¥4637.76, then there isn’t much room for the share price grow beyond what it’s currently trading. In addition to this, TOTO has a low beta, which suggests its share price is less volatile than the wider market.

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What kind of growth will TOTO generate?

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 TOTO, it is expected to deliver a relatively unexciting earnings growth of 4.1%, which doesn’t help build up its investment thesis. Growth doesn’t appear to be a main reason for a buy decision for the company, at least in the near term.

What This Means For You

Are you a shareholder? 5332’s 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 5332, now may not be the most optimal time to buy, given it is trading around its fair value. However, the positive outlook 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.

Keep in mind, when it comes to analysing a stock it's worth noting the risks involved. In terms of investment risks, we've identified 1 warning sign with TOTO, and understanding this should be part of your investment process.

If you are no longer interested in TOTO, 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.