Should You Investigate AB Volvo (publ) (STO:VOLV B) At kr267?

Let's talk about the popular AB Volvo (publ) (STO:VOLV B). The company's shares received a lot of attention from a substantial price movement on the OM over the last few months, increasing to kr292 at one point, and dropping to the lows of kr249. 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 AB Volvo's current trading price of kr267 reflective of the actual value of the large-cap? Or is it currently undervalued, providing us with the opportunity to buy? Let’s take a look at AB Volvo’s outlook and value based on the most recent financial data to see if there are any catalysts for a price change.

Check out our latest analysis for AB Volvo

What's The Opportunity In AB Volvo?

Good news, investors! AB Volvo is still a bargain right now. Our valuation model shows that the intrinsic value for the stock is SEK417.16, but it is currently trading at kr267 on the share market, meaning that there is still an opportunity to buy now. Another thing to keep in mind is that AB Volvo’s share price may be quite stable relative to the rest of the market, as indicated by its low beta. This means that if you believe the current share price should move towards its intrinsic value over time, a low beta could suggest it is not likely to reach that level anytime soon, and once it’s there, it may be hard to fall back down into an attractive buying range again.

What kind of growth will AB Volvo 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. However, with a negative profit growth of -4.9% expected over the next couple of years, near-term growth certainly doesn’t appear to be a driver for a buy decision for AB Volvo. This certainty tips the risk-return scale towards higher risk.

What This Means For You

Are you a shareholder? Although VOLV B is currently undervalued, the negative outlook does bring on some uncertainty, which equates to higher risk. Consider whether you want to increase your portfolio exposure to VOLV B, or whether diversifying into another stock may be a better move for your total risk and return.

Are you a potential investor? If you’ve been keeping tabs on VOLV B for some time, but hesitant on making the leap, we recommend you research further into the stock. Given its current undervaluation, now is a great time to make a decision. But keep in mind the risks that come with negative growth prospects in the future.

In light of this, if you'd like to do more analysis on the company, it's vital to be informed of the risks involved. When we did our research, we found 2 warning signs for AB Volvo (1 is concerning!) that we believe deserve your full attention.

If you are no longer interested in AB Volvo, you can use our free platform to see our list of over 50 other stocks with a high growth potential.

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

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.