At US$31.76, Is It Time To Put CenterPoint Energy, Inc. (NYSE:CNP) On Your Watch List?

Today we're going to take a look at the well-established CenterPoint Energy, Inc. (NYSE:CNP). The company's stock saw a double-digit share price rise of over 10% in the past couple of months on the NYSE. The company is now trading at yearly-high levels following the recent surge in its share price. As a large-cap stock with high coverage by analysts, you could assume any recent changes in the company’s outlook is already priced into the stock. But what if there is still an opportunity to buy? Let’s take a look at CenterPoint Energy’s outlook and value based on the most recent financial data to see if the opportunity still exists.

View our latest analysis for CenterPoint Energy

What's The Opportunity In CenterPoint Energy?

According to our valuation model, CenterPoint Energy seems to be fairly priced at around 15.84% above our intrinsic value, which means if you buy CenterPoint Energy today, you’d be paying a relatively fair price for it. And if you believe the company’s true value is $27.42, there’s only an insignificant downside when the price falls to its real value. What's more, CenterPoint Energy’s share price may be more stable over time (relative to the market), as indicated by its low beta.

What does the future of CenterPoint Energy look like?

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. CenterPoint Energy's earnings over the next few years are expected to increase by 39%, indicating a highly optimistic future ahead. This should lead to more robust cash flows, feeding into a higher share value.

What This Means For You

Are you a shareholder? CNP’s optimistic 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 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 an eye on CNP, now may not be the most optimal time to buy, given it is trading around its fair value. However, the positive outlook is encouraging for the company, which means it’s worth diving deeper into other factors such as the strength of its balance sheet, in order to take advantage of the next price drop.

If you'd like to know more about CenterPoint Energy as a business, it's important to be aware of any risks it's facing. For example, we've found that CenterPoint Energy has 3 warning signs (1 is significant!) that deserve your attention before going any further with your analysis.

If you are no longer interested in CenterPoint Energy, 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.