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ASSA ABLOY (OM:ASSA B) Stock May Be 29% Undervalued Despite Record Q3 Results

Simply Wall St · 2d ago

ASSA ABLOY shares have quietly built a strong track record in recent years, which puts the focus squarely on whether the current SEK 372.9 price is backed by the cash the business can generate. With fresh portfolio moves and record operational results in the background, the question is how well the stream of future cash flows lines up with where the stock trades today.

  • Over the past 3 years the stock has returned 68.8%, so a lot of value has already been recognized and any cash flow based case now has more to justify.
  • Record sales, higher operating profit and recent acquisitions alongside a planned sale of the HID PKI unit may reshape ASSA ABLOY's mix of cash generators, timing of free cash flow and reinvestment needs.
  • What if you looked at ASSA ABLOY through its earnings instead? See what ASSA ABLOY's 25.3x P/E says about the price.

For investors, the debate is whether ASSA ABLOY's current price is appropriately supported by the cash flows implied by a Discounted Cash Flow (DCF) style intrinsic value estimate.

If you want to stress test this same cash flow question beyond ASSA ABLOY, line it up against other businesses in the 195 high quality undervalued stocks.

Is ASSA ABLOY Still Cheap on Cash Flow?

The Discounted Cash Flow (DCF) model here uses the cash ASSA ABLOY can return to shareholders as its anchor. On the latest numbers, the business produced about SEK 21.2b of free cash flow over the last twelve months, and analysts expect this stream to keep growing into the early 2030s before settling into a more mature pattern.

Those projections, when discounted back, point to an estimated intrinsic value that the DCF suggests is meaningfully above the current SEK372.90 share price. Because the firm recently posted record Q3 2026 sales and operating profit while still being priced below what the cash flow model supports, the market appears cautious about how durable that free cash flow profile will be. Find out what ASSA ABLOY could be worth using our Discounted Cash Flow (DCF) estimate.

The ASSA ABLOY Narrative: What Would Justify Today's Price?

Simply Wall St Narratives for ASSA ABLOY pick up where the DCF puzzle leaves off and explain which paths for growth, margins and earnings would need to occur for the share price to look materially higher or lower than it does today. Each scenario links its numbers to a clear view of how ASSA ABLOY's expansion prospects, profitability and risk profile might evolve. This gives you something concrete to revisit as new information emerges on the Community page.

ASSA ABLOY investors are split between those who see more upside in the margin mix story and those who think a lot of that strength is already priced in.

Bull case: 9% undervalued

"Ongoing operational efficiencies from manufacturing footprint programs, lean initiatives, automation and administrative savings are now visible in record group EBIT margins around 17%…"

Discover why this Narrative puts ASSA ABLOY at 9% undervalued.

Bear case: 10% overvalued

"Although acquisition capacity is supported by net debt to EBITDA of around 2.1 to 2.2x and cash conversion above 100%, the margin dilution and underperformance from the Level Lock acquisition suggest that further deal making could drag on EBIT…"

Explore why this Narrative puts ASSA ABLOY at 10% overvalued.

One more thing to check on ASSA ABLOY before you lean on the valuation

Price and cash flow only tell part of the story, since Simply Wall St's broader checks have flagged specific issues around ASSA ABLOY that are worth weighing for yourself before you move further. Take a closer look at 1 warning sign before settling on a valuation.