Is It Time To Consider Buying Skanska AB (publ) (STO:SKA B)?

Skanska AB (publ) (STO:SKA B), is not the largest company out there, but it received a lot of attention from a substantial price movement on the OM over the last few months, increasing to kr228 at one point, and dropping to the lows of kr151. 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 Skanska's current trading price of kr160 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 Skanska’s outlook and value based on the most recent financial data to see if there are any catalysts for a price change.

View our latest analysis for Skanska

What's the opportunity in Skanska?

Good news, investors! Skanska is still a bargain right now. My valuation model shows that the intrinsic value for the stock is SEK243.78, but it is currently trading at kr160 on the share market, meaning that there is still an opportunity to buy now. Although, there may be another chance to buy again in the future. This is because Skanska’s beta (a measure of share price volatility) is high, meaning its price movements will be exaggerated relative to the rest of the market. If the market is bearish, the company's shares will likely fall by more than the rest of the market, providing a prime buying opportunity.

What does the future of Skanska look like?

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. Though in the case of Skanska, it is expected to deliver a relatively unexciting earnings growth of 6.1%, 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? Even though growth is relatively muted, since SKA B is currently undervalued, it may be a great time to increase your holdings in the stock. However, there are also other factors such as financial health to consider, which could explain the current undervaluation.

Are you a potential investor? If you’ve been keeping an eye on SKA B for a while, now might be the time to make a leap. Its future outlook isn’t fully reflected in the current share price yet, which means it’s not too late to buy SKA B. But before you make any investment decisions, consider other factors such as the track record of its management team, in order to make a well-informed investment decision.

If you want to dive deeper into Skanska, you'd also look into what risks it is currently facing. Case in point: We've spotted 3 warning signs for Skanska you should be mindful of and 1 of these shouldn't be ignored.

If you are no longer interested in Skanska, 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.