At US$92.60, Is It Time To Put Ashland Global Holdings Inc. (NYSE:ASH) On Your Watch List?

By
Simply Wall St
Published
October 08, 2021
NYSE:ASH
Source: Shutterstock

Ashland Global Holdings Inc. (NYSE:ASH), might not be a large cap stock, but it saw a double-digit share price rise of over 10% in the past couple of months on the NYSE. As a mid-cap stock with high coverage by analysts, you could assume any recent changes in the company’s outlook is already priced into the stock. However, could the stock still be trading at a relatively cheap price? Today I will analyse the most recent data on Ashland Global Holdings’s outlook and valuation to see if the opportunity still exists.

Check out our latest analysis for Ashland Global Holdings

What is Ashland Global Holdings worth?

The stock seems fairly valued at the moment according to my valuation model. It’s trading around 7.36% above my intrinsic value, which means if you buy Ashland Global Holdings today, you’d be paying a relatively reasonable price for it. And if you believe that the stock is really worth $86.25, then there isn’t really any room for the share price grow beyond what it’s currently trading. So, is there another chance to buy low in the future? Given that Ashland Global Holdings’s share is fairly volatile (i.e. its price movements are magnified relative to the rest of the market) this could mean the price can sink lower, giving us an opportunity to buy later on. This is based on its high beta, which is a good indicator for share price volatility.

What does the future of Ashland Global Holdings look like?

earnings-and-revenue-growth
NYSE:ASH Earnings and Revenue Growth October 9th 2021

Investors looking for growth in their portfolio may want to consider the prospects of a company before buying its shares. Although value investors would argue that it’s the intrinsic value relative to the price that matter the most, a more compelling investment thesis would be high growth potential at a cheap price. However, with a relatively muted profit growth of 7.7% expected over the next year, growth doesn’t seem like a key driver for a buy decision for Ashland Global Holdings, at least in the short term.

What this means for you:

Are you a shareholder? ASH’s future growth appears to have been factored into the current share price, with shares trading around its fair value. However, there are also other important factors which we haven’t considered today, such as the track record of its management team. Have these factors changed since the last time you looked at the stock? Will you have enough confidence to invest in the company should the price drop below its fair value?

Are you a potential investor? If you’ve been keeping tabs on ASH, now may not be the most optimal time to buy, given it is trading around its fair value. However, the positive outlook means it’s worth further examining other factors such as the strength of its balance sheet, in order to take advantage of the next price drop.

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. Be aware that Ashland Global Holdings is showing 3 warning signs in our investment analysis and 1 of those doesn't sit too well with us...

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

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