ICL Group (NYSE:ICL) Valuation in Focus After DOE Funding Withdrawal and Potential Project Write-Off

ICL Group (NYSE:ICL) is in the spotlight after the U.S. Department of Energy rescinded grant funding for its planned lithium iron phosphate cathode material plant in St. Louis. This move has prompted the company to reassess the project's future and consider the financial impact of a possible $40 million investment write-off.

See our latest analysis for ICL Group.

ICL Group’s share price hasn’t been immune to shifting fortunes in the past year. While the stock has climbed an impressive 26.6% year-to-date and boasts a hefty 57.9% total shareholder return over twelve months, momentum has cooled lately. The stock saw a modest 3.5% one-month share price gain following a volatile stretch that included the DOE funding decision. Long-term holders have still enjoyed more than a doubling of total returns over five years, despite some bumps along the way.

If you’re reassessing your portfolio in light of ICL’s recent news, it could be the right moment to broaden your search and discover fast growing stocks with high insider ownership

With recent volatility and the funding setback weighing on sentiment, the key question now is whether ICL Group’s current valuation offers a compelling entry point or if the market has already taken its growth prospects into account.

Most Popular Narrative: 6.8% Undervalued

ICL Group’s current share price sits below the most widely followed narrative’s fair value estimate, signaling potential upside if their assumptions prove accurate. One of the central drivers for this outlook is the company’s strategic move into new markets and innovative segments.

The company's innovation and investment in new product pipelines, particularly in areas like battery materials and specialty fertilizers, indicate potential for future revenue growth and expanded market opportunities. This could positively impact net margins.

Read the complete narrative.

Curious about what is propelling such a bullish stance? This narrative is built on aggressive growth in cutting-edge markets and margin expansion, backed by numbers you might not expect. Discover how much the future earnings trajectory and analyst optimism could mean for today’s valuation.

Result: Fair Value of $6.74 (UNDERVALUED)

Have a read of the narrative in full and understand what's behind the forecasts.

However, ongoing geopolitical tensions and any downturn in key phosphate markets remain real risks that could offset ICL’s projected growth potential.

Find out about the key risks to this ICL Group narrative.

Another View: What Does the DCF Say?

Looking at ICL Group through the SWS DCF model lens, a different story emerges. While some see undervaluation based on broader narratives, our DCF model puts fair value at $5.37, which is below today's price. Could this sharper discount mean the market is leaning toward too much optimism, or is the DCF missing something the crowd has identified?

Look into how the SWS DCF model arrives at its fair value.

Simply Wall St performs a discounted cash flow (DCF) on every stock in the world every day (check out ICL Group for example). We show the entire calculation in full. You can track the result in your watchlist or portfolio and be alerted when this changes, or use our stock screener to discover undervalued stocks based on their cash flows. If you save a screener we even alert you when new companies match - so you never miss a potential opportunity.

Build Your Own ICL Group Narrative

If this perspective doesn’t quite line up with your own, or if you’d rather dig into the numbers yourself, you can craft a personalized narrative in just a few minutes. Do it your way

A great starting point for your ICL Group research is our analysis highlighting 1 key reward and 1 important warning sign that could impact your investment decision.

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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.

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