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Lenovo (SEHK:992) Valuation Check After Launching Certified Refurbishment Services Across 14 European Markets

Simply Wall St · 2d ago

Lenovo Group (SEHK:992) just rolled out its Certified Refurbishment Services across 14 European markets, giving enterprises a way to stretch device lifecycles, trim e-waste, and potentially support steadier, margin friendly service revenue.

See our latest analysis for Lenovo Group.

Investors seem cautiously optimistic, with Lenovo’s 1 year total shareholder return of 11.55% and a strong 3 year total shareholder return of 80.87% contrasting with a softer 30 day share price return of minus 9.80% and a modest year to date share price gain of 2.45%. This suggests that longer term momentum is intact even as the stock consolidates around HK$10.03.

If this kind of sustainability driven tech story interests you, it could be worth exploring other high growth tech and AI stocks that are shaping the next wave of enterprise IT spending.

With earnings still growing, a sizeable discount to analyst targets, and the stock trading well below some intrinsic value estimates, is Lenovo quietly undervalued, or is the market already pricing in its next leg of growth?

Most Popular Narrative Narrative: 20.5% Undervalued

Against Lenovo’s last close of HK$10.03, the most followed narrative points to a higher intrinsic value, hinging on steady growth, resilient margins, and disciplined discounting.

The analysts have a consensus price target of HK$13.415 for Lenovo Group based on their expectations of its future earnings growth, profit margins and other risk factors. However, there is a degree of disagreement amongst analysts, with the most bullish reporting a price target of HK$16.07, and the most bearish reporting a price target of just HK$11.0.

Read the complete narrative.

Want to see what kind of revenue curve and margin lift underpin this valuation gap, and how a richer future earnings multiple ties it together, despite rising risks?

Result: Fair Value of $12.61 (UNDERVALUED)

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

However, rising memory costs and potential supply chain disruptions could squeeze margins and slow growth, challenging the idea that Lenovo’s undervaluation is purely an opportunity.

Find out about the key risks to this Lenovo Group narrative.

Build Your Own Lenovo Group Narrative

If you are not fully convinced by this storyline or want to dig into the numbers yourself, you can build a custom view in minutes: Do it your way.

A great starting point for your Lenovo Group research is our analysis highlighting 4 key rewards and 2 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.