Why Ashland Inc. (NYSE:ASH) Could Be Worth Watching

Ashland Inc. (NYSE:ASH), is not the largest company out there, but it had a relatively subdued couple of weeks in terms of changes in share price, which continued to float around the range of US$93.57 to US$101. However, is this the true valuation level of the mid-cap? Or is it currently undervalued, providing us with the opportunity to buy? Let’s take a look at Ashland’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 Ashland

What Is Ashland Worth?

According to our valuation model, Ashland seems to be fairly priced at around 2.07% above our intrinsic value, which means if you buy Ashland today, you’d be paying a relatively reasonable price for it. And if you believe the company’s true value is $95.61, there’s only an insignificant downside when the price falls to its real value. In addition to this, Ashland has a low beta, which suggests its share price is less volatile than the wider market.

What does the future of Ashland 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. With profit expected to grow by 34% over the next couple of years, the future seems bright for Ashland. It looks like higher cash flow is on the cards for the stock, which should feed into a higher share valuation.

What This Means For You

Are you a shareholder? It seems like the market has already priced in ASH’s positive outlook, with shares trading around its fair value. However, there are also other important factors which we haven’t considered today, such as the financial strength of the company. 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 optimistic prospect is encouraging for the company, which 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.

So while earnings quality is important, it's equally important to consider the risks facing Ashland at this point in time. At Simply Wall St, we found 2 warning signs for Ashland and we think they deserve your attention.

If you are no longer interested in Ashland, 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.

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