Beijer Ref (OM:BEIJ B): Exploring Valuation Following Strong Earnings and New Australian Partnership

Beijer Ref (OM:BEIJ B) just delivered higher sales and net income for the third quarter and nine-month period. The company also unveiled a partnership to expand GMG’s proprietary heat transfer coating in Australia. Both highlights are drawing fresh attention from investors.

See our latest analysis for Beijer Ref.

Even with Beijer Ref’s latest earnings beat and its new partnership in Australia, the stock’s momentum has struggled to keep pace, as reflected in its nearly 8% share price decline year-to-date. Over the longer term, however, total shareholder return has been robust, rising more than 90% over five years. The one-year total return sits at -4.6%. Short-term sentiment looks cautious, even as long-term holders remain in solid shape.

If you’re curious to see what other fast-rising companies with significant insider backing are out there, now’s the perfect time to check out fast growing stocks with high insider ownership.

With shares still down for the year despite stronger results and a fresh strategic partnership, investors have to wonder: does Beijer Ref now offer compelling value, or is its future growth already factored into the price?

Most Popular Narrative: 16% Undervalued

Beijer Ref currently trades below the fair value estimated in the most widely followed narrative, setting up a potential valuation gap. With investor focus turning to future growth drivers and evolving industry trends, the narrative provides the clearest justification for where the price could go next.

The ongoing global transition to lower-GWP (Global Warming Potential) refrigerants, exemplified by Beijer Ref's rapid move to 454B products in North America and growing green OEM sales in EMEA and Asia, is accelerating, and regulatory requirements are expected to further increase demand for Beijer Ref's sustainable portfolio, supporting higher sales growth and price/mix improvement.

Read the complete narrative.

Want to know what powers this optimistic price target? The narrative is fueled by bold forecasts for future sales, margins, and a profit multiple that’s more often seen in top-tier growth stocks. What are those aggressive underlying assumptions? The real story is in the details. Dive in and see what’s driving this valuation.

Result: Fair Value of $181 (UNDERVALUED)

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

However, execution stumbles in North America or tougher regulatory changes could undermine margins and challenge the optimistic growth scenario that is driving current valuation expectations.

Find out about the key risks to this Beijer Ref narrative.

Another View: Are the Numbers Telling a Different Story?

Taking a fresh look, our DCF model paints a less optimistic picture. It suggests Beijer Ref is actually trading above its fair value, which could mean less upside and more valuation risk than the consensus narrative implies. Could the DCF’s stricter lens signal caution for investors?

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 Beijer Ref 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 849 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 Beijer Ref Narrative

If you see things differently or want to follow your own thread in the numbers, you can easily shape your own perspective in just a few minutes. Do it your way.

A good starting point is our analysis highlighting 2 key rewards investors are optimistic about regarding Beijer Ref.

Looking for More Winning Investment Ideas?

Seize the moment and expand your investment search beyond the usual picks to set yourself up to catch the next big opportunity before it’s on everyone’s radar.

• Tap into tomorrow’s tech by scanning these 26 AI penny stocks to get early access to AI-driven pioneers transforming industries around the globe.
• Grow your passive income by checking out these 21 dividend stocks with yields > 3%, where you’ll find companies consistently delivering dividends above 3% with healthy business fundamentals.
• Ride the volatility of digital innovation by looking into these 81 cryptocurrency and blockchain stocks and find stocks shaping the future of cryptocurrency and blockchain ecosystems.

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.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team@simplywallst.com