Now is a good time to review Holcim Ltd (VTX: HOLN)?

Holcim Ltd (VTX: HOLN) has seen its share price hover around a small range of CHF 44.08 to CHF 48.45 in recent weeks. But does this really reflect the value of the large cap stock? Or is it currently undervalued, giving us the opportunity to buy? Let’s take a look at the outlook and value of Holcim based on the most recent financial data to see if there are any catalysts for a price change.

Check out our latest review for Holcim

What is the opportunity at Holcim?

The stock price looks reasonable at the moment based on my multiple price model, where I compare the company’s price-to-earnings ratio to the industry average. I used the price / earnings ratio in this case because there is not enough visibility to forecast its cash flow. The stock’s ratio of 12.68x is currently trading slightly below the ratio of its industry peers of 15.99x, which means if you buy Holcim today, you would pay a decent price for it. And if you think Holcim should trade at this level in the long run, then there isn’t much to gain over other competitors in the industry. Is there another opportunity to buy low in the future? Since the Holcim stock price is quite volatile, we could potentially see it go down (or up) in the future, giving us another chance to buy. This is based on its high beta, which is a good indicator of how the stock is moving relative to the rest of the market.

Can we expect growth for Holcim?

SWX: HOLN Earnings and Revenue Growth December 18, 2021

Future prospects are an important aspect when considering buying a stock, especially if you are an investor looking for growth in your portfolio. Buying a large business with a solid outlook for a cheap price is always a good investment, so let’s also take a look at the future expectations of the business. Holcim’s profits over the next few years are expected to increase by 40%, indicating a very optimistic future. This should lead to more robust cash flow, fueling a higher value of the stock.

What this means for you:

Are you a shareholder? It appears the market has already taken in the positive outlook for HOLN, with stocks trading around industry price multiples. However, there are also other important factors that we did not consider today, such as the track record of its management team. Have these factors changed since you last watched HOLN? Will you have enough conviction to buy if the price fluctuates below the industry PE ratio?

Are you a potential investor? If you’ve been keeping your eye on HOLN, this might not be the most optimal time to buy, given that it trades around industry price multiples. However, the bullish forecast is encouraging for HOLN, which means it is worth digging into other factors such as the strength of its balance sheet, in order to profit from the next price drop.

If you want to dive deeper into Holcim, you will also take a look at the risks it currently faces. During our analysis, we found that Holcim has 1 warning sign and it would be unwise to ignore it.

If you are no longer interested in Holcim, you can use our free platform to view our list of over 50 other high growth potential stocks.

This Simply Wall St article is general in nature. We provide commentary based on historical data and analyst forecasts using only 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 into account your goals or your financial situation. Our aim is to bring you long-term, targeted analysis based on fundamental data. Note that our analysis may not take into account the latest announcements from price sensitive companies or qualitative material. Simply Wall St has no position in any of the stocks mentioned.