UGI (UGI): Evaluating Valuation After Strong Double-Digit Share Price Gains in 2024

UGI (UGI) has caught investors’ attention with its recent stock performance. The company’s share price has climbed nearly 7% over the past month, in addition to year-to-date gains exceeding 20%.

See our latest analysis for UGI.

Momentum has clearly been building for UGI, with the share price up over 20% so far this year and delivering a 48% total return to shareholders over the past twelve months. A steady stream of positive moves has fueled renewed optimism and set a solid tone for both the short and long term.

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With this impressive run, the big question for investors is whether UGI is currently undervalued, or if its recent gains mean the market has already priced in the company’s future growth prospects. Is there still a buying opportunity?

Most Popular Narrative: 17.2% Undervalued

The most widely followed narrative sees UGI's fair value at $41 per share, compared to the last close price of $33.95. This suggests notable upside if projections play out. This optimistic view depends on both the company's strategic transition and external regulatory tailwinds, outlining a path for robust earnings growth.

Strategic investments in renewable natural gas (RNG) projects, bonus depreciation potential, and stronger regulatory incentives through recent legislation (for example, the One Big Beautiful Bill Act) are expected to drive long-term EBITDA growth and improve net margins.

Read the complete narrative.

Want to know what two pivotal assumptions drive this fair value? Hint: the narrative forecasts sizable profit margin expansion and sets a future profit multiple below industry norms. If you’re curious which bold projections have analysts rallying around that higher price, uncover them by reading the complete breakdown yourself.

Result: Fair Value of $41.00 (UNDERVALUED)

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

However, persistent customer attrition at AmeriGas and rising operating costs across core segments could present challenges to UGI's projected margin improvements in the coming years.

Find out about the key risks to this UGI narrative.

Build Your Own UGI Narrative

If you see things differently or want to dig into the numbers on your own, you can build your own perspective in just minutes. Do it your way

A great starting point for your UGI research is our analysis highlighting 4 key rewards and 3 important warning signs 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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