Stock Analysis

Is Now The Time To Look At Buying Kennedy-Wilson Holdings, Inc. (NYSE:KW)?

  •  Updated
NYSE:KW
Source: Shutterstock

Kennedy-Wilson Holdings, Inc. (NYSE:KW), might not be a large cap stock, but it saw its share price hover around a small range of US$19.06 to US$20.89 over the last few weeks. But is this actually reflective of the share value of the mid-cap? Or is it currently undervalued, providing us with the opportunity to buy? Let’s take a look at Kennedy-Wilson Holdings’s outlook and value based on the most recent financial data to see if there are any catalysts for a price change.

See our latest analysis for Kennedy-Wilson Holdings

Is Kennedy-Wilson Holdings still cheap?

According to my price multiple model, where I compare the company's price-to-earnings ratio to the industry average, the stock currently looks expensive. 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 Kennedy-Wilson Holdings’s ratio of 27.96x is above its peer average of 22.76x, which suggests the stock is trading at a higher price compared to the Real Estate industry. But, is there another opportunity to buy low in the future? Since Kennedy-Wilson Holdings’s share price is quite volatile, this could mean it can sink lower (or rise even further) in the future, giving us another chance to invest. This is based on its high beta, which is a good indicator for how much the stock moves relative to the rest of the market.

Can we expect growth from Kennedy-Wilson Holdings?

earnings-and-revenue-growth
NYSE:KW Earnings and Revenue Growth July 9th 2021

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. Though in the case of Kennedy-Wilson Holdings, it is expected to deliver a highly negative earnings growth in the upcoming, which doesn’t help build up its investment thesis. It appears that risk of future uncertainty is high, at least in the near term.

What this means for you:

Are you a shareholder? If you believe KW is currently trading above its peers, selling high and buying it back up again when its price falls towards the industry PE ratio can be profitable. Given the uncertainty from negative growth in the future, this could be the right time to reduce your total portfolio risk. But before you make this decision, take a look at whether its fundamentals have changed.

Are you a potential investor? If you’ve been keeping an eye on KW for a while, now may not be the best time to enter into the stock. The price has climbed past its industry peers, in addition to a risky future outlook. However, there are also other important factors which we haven’t considered today, such as the track record of its management. Should the price fall in the future, will you be well-informed enough to buy?

If you'd like to know more about Kennedy-Wilson Holdings as a business, it's important to be aware of any risks it's facing. Case in point: We've spotted 6 warning signs for Kennedy-Wilson Holdings you should be mindful of and 2 of these make us uncomfortable.

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

If you decide to trade Kennedy-Wilson Holdings, use the lowest-cost* platform that is rated #1 Overall by Barron’s, Interactive Brokers. Trade stocks, options, futures, forex, bonds and funds on 135 markets, all from a single integrated account. Promoted


Valuation is complex, but we're helping make it simple.

Find out whether Kennedy-Wilson Holdings is potentially over or undervalued by checking out our comprehensive analysis, which includes fair value estimates, risks and warnings, dividends, insider transactions and financial health.

View the Free Analysis