Should You Investigate Wihlborgs Fastigheter AB (publ) (STO:WIHL) At kr79.35?

While Wihlborgs Fastigheter AB (publ) (STO:WIHL) might not be the most widely known stock at the moment, it saw a decent share price growth in the teens level on the OM over the last few months. With many analysts covering the mid-cap stock, we may expect any price-sensitive announcements have already been factored into the stock’s share price. But what if there is still an opportunity to buy? Let’s take a look at Wihlborgs Fastigheter’s outlook and value based on the most recent financial data to see if the opportunity still exists.

See our latest analysis for Wihlborgs Fastigheter

What Is Wihlborgs Fastigheter Worth?

The share price seems sensible at the moment according to my price multiple model, where I compare the company's price-to-earnings ratio to the industry average. In this instance, I’ve used the price-to-earnings (PE) ratio given that there is not enough information to reliably forecast the stock’s cash flows. I find that Wihlborgs Fastigheter’s ratio of 10.66x is trading slightly above its industry peers’ ratio of 8.92x, which means if you buy Wihlborgs Fastigheter today, you’d be paying a relatively reasonable price for it. And if you believe Wihlborgs Fastigheter should be trading in this range, then there isn’t really any room for the share price grow beyond the levels of other industry peers over the long-term. In addition to this, it seems like Wihlborgs Fastigheter’s share price is quite stable, which could mean there may be less chances to buy low in the future now that it’s trading around the price multiples of other industry peers. This is because the stock is less volatile than the wider market given its low beta.

Can we expect growth from Wihlborgs Fastigheter?

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. However, with a negative profit growth of -19% expected over the next couple of years, near-term growth certainly doesn’t appear to be a driver for a buy decision for Wihlborgs Fastigheter. This certainty tips the risk-return scale towards higher risk.

What This Means For You

Are you a shareholder? Currently, WIHL appears to be trading around industry price multiples, but given the uncertainty from negative returns in the future, this could be the right time to de-risk your portfolio. Is your current exposure to the stock optimal for your total portfolio? And is the opportunity cost of holding a negative-outlook stock too high? Before you make a decision on WIHL, take a look at whether its fundamentals have changed.

Are you a potential investor? If you’ve been keeping an eye on WIHL for a while, now may not be the most optimal time to buy, given it is trading around industry price multiples. This means there’s less benefit from mispricing. Furthermore, the negative growth outlook increases the risk of holding the stock. However, there are also other important factors we haven’t considered today, which can help crystallize your views on WIHL should the price fluctuate below the industry PE ratio.

If you want to dive deeper into Wihlborgs Fastigheter, you'd also look into what risks it is currently facing. To help with this, we've discovered 2 warning signs (1 is significant!) that you ought to be aware of before buying any shares in Wihlborgs Fastigheter.

If you are no longer interested in Wihlborgs Fastigheter, 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.