Olav Thon Eiendomsselskap (OB:OLT): Assessing Valuation Following Q3 Results and Earnings Growth

Olav Thon Eiendomsselskap (OB:OLT) released its third quarter and nine-month earnings, highlighting growth in both sales and net income compared to last year. Investors are taking a closer look at these developments.

See our latest analysis for Olav Thon Eiendomsselskap.

Olav Thon Eiendomsselskap’s latest earnings have kept investors interested, and that is showing up in performance numbers. While the 30-day share price return is slightly negative, its 2024 year-to-date share price is up 19.3%, and the one-year total shareholder return is a robust 25.5%. Over the past three and five years, momentum has stayed strong with total shareholder returns of 70.4% and 105.9%. This suggests both renewed optimism and sustained long-term growth potential despite some recent volatility.

If Olav Thon Eiendomsselskap’s positive long-term returns have you wondering what else stands out, this could be a great time to discover fast growing stocks with high insider ownership

With shares gaining strong ground so far this year and earnings growth outpacing last year, the big question remains: is Olav Thon Eiendomsselskap undervalued at today’s prices, or has the market already factored in future growth?

Price-to-Earnings of 11.4x: Is it justified?

The latest valuation shows Olav Thon Eiendomsselskap trades at a price-to-earnings (P/E) ratio of 11.4x, based on its recent closing price of NOK272. This places the stock at a lower earnings-based multiple than both its industry and peer group.

The price-to-earnings ratio compares a company’s share price to its earnings per share. It is a core measure investors use to gauge how much the market is willing to pay for current earnings. This metric is especially relevant in the real estate sector, where capital structure and profit consistency matter.

A lower P/E suggests the market is currently underpricing Olav Thon Eiendomsselskap’s earnings relative to peers and the industry. At 11.4x, the multiple is below the European Real Estate industry average of 14.5x and the peer average of 17.1x. Compared to a fair value P/E ratio estimate of 13x, the current valuation indicates further room for the market to rerate upward if operational momentum continues.

Explore the SWS fair ratio for Olav Thon Eiendomsselskap

Result: Price-to-Earnings of 11.4x (UNDERVALUED)

However, slower net income growth and recent share price volatility could pose challenges. These factors may potentially dampen expectations for continued strong performance ahead.

Find out about the key risks to this Olav Thon Eiendomsselskap narrative.

Another View: What Does the DCF Say?

Looking at Olav Thon Eiendomsselskap from a different angle, our DCF model values the shares at NOK205.01. This is noticeably lower than the current price of NOK272. While the earnings-based multiple suggests the stock is undervalued, the DCF model points to possible overvaluation. Could market optimism be running ahead of business fundamentals?

Look into how the SWS DCF model arrives at its fair value.

Simply Wall St performs a discounted cash flow (DCF) on every stock in the world every day (check out Olav Thon Eiendomsselskap for example). We show the entire calculation in full. You can track the result in your watchlist or portfolio and be alerted when this changes, or use our stock screener to discover 874 undervalued stocks based on their cash flows. If you save a screener we even alert you when new companies match - so you never miss a potential opportunity.

Build Your Own Olav Thon Eiendomsselskap Narrative

If these figures or conclusions do not align with your own view, you can easily dive into the data and craft a personal take in just a few minutes as well. Do it your way

A great starting point for your Olav Thon Eiendomsselskap research is our analysis highlighting 3 key rewards and 3 important warning signs that could impact your investment decision.

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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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