Yahoo Finance Is It Time To Consider Buying Kontoor Brands, Inc. (NYSE:KTB)?
Kontoor Brands, Inc. (NYSE:KTB), is not the largest company out there, but it received a lot of attention from a substantial price increase on the NYSE over the last few months. The recent jump in the share price has meant that the company is trading at close to its 52-week high. As a mid-cap stock with high coverage by analysts, you could assume any recent changes in the company’s outlook is already priced into the stock. But what if there is still an opportunity to buy? Today we will analyse the most recent data on Kontoor Brands’s outlook and valuation to see if the opportunity still exists.
View our latest analysis for Kontoor Brands
What's The Opportunity In Kontoor Brands?
The stock seems fairly valued at the moment according to our valuation model. It’s trading around 17.47% above our intrinsic value, which means if you buy Kontoor Brands today, you’d be paying a relatively reasonable price for it. And if you believe the company’s true value is $62.29, there’s only an insignificant downside when the price falls to its real value. So, is there another chance to buy low in the future? Given that Kontoor Brands’s share is fairly volatile (i.e. its price movements are magnified relative to the rest of the market) this could mean the price can sink lower, giving us an opportunity to buy later on. This is based on its high beta, which is a good indicator for share price volatility.
What does the future of Kontoor Brands look like?
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. Buying a great company with a robust outlook at a cheap price is always a good investment, so let’s also take a look at the company's future expectations. In the upcoming year, Kontoor Brands' earnings are expected to increase by 21%, 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? KTB’s optimistic future growth appears to have been factored into the current share price, with shares trading around its fair value. However, there are also other important factors which we haven’t considered today, such as the track record of its management team. Have these factors changed since the last time you looked at the stock? Will you have enough confidence to invest in the company should the price drop below its fair value?
Are you a potential investor? If you’ve been keeping tabs on KTB, now may not be the most optimal time to buy, given it is trading around its fair value. However, the optimistic prospect is encouraging for the company, which means it’s worth diving deeper into other factors such as the strength of its balance sheet, in order to take advantage of the next price drop.
So while earnings quality is important, it's equally important to consider the risks facing Kontoor Brands at this point in time. For example, we've discovered 2 warning signs that you should run your eye over to get a better picture of Kontoor Brands.
If you are no longer interested in Kontoor Brands, you can use our free platform to see our list of over 50 other stocks with a high growth potential.
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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.
