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Should You Think About Buying Wacker Chemie AG (ETR:WCH) Now?

Simply Wall St · 06/20 05:09

While Wacker Chemie AG (ETR:WCH) might not have the largest market cap around , it received a lot of attention from a substantial price movement on the XTRA over the last few months, increasing to €87.18 at one point, and dropping to the lows of €59.50. 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 Wacker Chemie's current trading price of €59.90 reflective of the actual value of the mid-cap? Or is it currently undervalued, providing us with the opportunity to buy? Let’s take a look at Wacker Chemie’s outlook and value based on the most recent financial data to see if there are any catalysts for a price change.

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Is Wacker Chemie Still Cheap?

Good news, investors! Wacker Chemie is still a bargain right now according to our price multiple model, which compares the company's price-to-earnings ratio to the industry average. We’ve used the price-to-earnings ratio in this instance because there’s not enough visibility to forecast its cash flows. The stock’s ratio of 15.75x is currently well-below the industry average of 19.97x, meaning that it is trading at a cheaper price relative to its peers. What’s more interesting is that, Wacker Chemie’s share price is quite stable, which could mean two things: firstly, it may take the share price a while to move closer to its industry peers, 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.

See our latest analysis for Wacker Chemie

What does the future of Wacker Chemie look like?

earnings-and-revenue-growth
XTRA:WCH Earnings and Revenue Growth June 20th 2025

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. Although value investors would argue that it’s the intrinsic value relative to the price that matter the most, a more compelling investment thesis would be high growth potential at a cheap price. Wacker Chemie's earnings over the next few years are expected to increase by 64%, 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? Since WCH is currently trading below the industry PE ratio, it may be a great time to accumulate more of your holdings in the stock. With a positive profit outlook on the horizon, it seems like this growth has not yet been fully factored into the share price. However, there are also other factors such as financial health to consider, which could explain the current price multiple.

Are you a potential investor? If you’ve been keeping an eye on WCH for a while, now might be the time to make a leap. Its buoyant future profit outlook isn’t fully reflected in the current share price yet, which means it’s not too late to buy WCH. But before you make any investment decisions, consider other factors such as the strength of its balance sheet, in order to make a well-informed investment decision.

If you want to dive deeper into Wacker Chemie, you'd also look into what risks it is currently facing. At Simply Wall St, we found 1 warning sign for Wacker Chemie and we think they deserve your attention.

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