Today we're going to take a look at the well-established PPL Corporation (NYSE:PPL). The company's stock saw significant share price movement during recent months on the NYSE, rising to highs of US$29.84 and falling to the lows of US$26.01. Some share price movements can give investors a better opportunity to enter into the stock, and potentially buy at a lower price. A question to answer is whether PPL's current trading price of US$27.91 reflective of the actual value of the large-cap? Or is it currently undervalued, providing us with the opportunity to buy? Let’s take a look at PPL’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 PPL
What Is PPL Worth?
According to our valuation model, the stock is currently overvalued by about 36%, trading at US$27.91 compared to our intrinsic value of $20.55. Not the best news for investors looking to buy! In addition to this, it seems like PPL’s share price is quite stable, which could mean two things: firstly, it may take the share price a while to fall back down to an attractive buying range, and secondly, there may be less chances to buy low in the future once it reaches that value. This is because the stock is less volatile than the wider market given its low beta.
Can we expect growth from PPL?
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 92% over the next couple of years, the future seems bright for PPL. 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? PPL’s optimistic future growth appears to have been factored into the current share price, with shares trading above its fair value. At this current price, shareholders may be asking a different question – should I sell? If you believe PPL should trade below its current price, selling high and buying it back up again when its price falls towards its real value can be profitable. 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 tabs on PPL for some time, now may not be the best time to enter into the stock. The price has surpassed its true value, which means there’s no upside from mispricing. However, the positive outlook is encouraging for PPL, which means it’s worth diving deeper into other factors in order to take advantage of the next price drop.
If you want to dive deeper into PPL, you'd also look into what risks it is currently facing. For example, we've found that PPL has 3 warning signs (2 are a bit unpleasant!) that deserve your attention before going any further with your analysis.
If you are no longer interested in PPL, you can use our free platform to see our list of over 50 other stocks with a high growth potential.
New: Manage All Your Stock Portfolios in One Place
We've created the ultimate portfolio companion for stock investors, and it's free.
• Connect an unlimited number of Portfolios and see your total in one currency
• Be alerted to new Warning Signs or Risks via email or mobile
• Track the Fair Value of your stocks
Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.
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
About NYSE:PPL
PPL
An energy company, focuses on providing electricity and natural gas to approximately 3.6 million customers in the United States.
Acceptable track record with imperfect balance sheet.
