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Have Investors Already Priced In WEC Energy Group Inc’s (WEC) Growth?

Let's talk about the popular WEC Energy Group Inc (NYSE:WEC). The company's shares saw significant share price volatility over the past couple of months on the NYSE, rising to the highs of $67.04 and falling to the lows of $60.72. This high level of volatility gives investors the opportunity to enter into the stock, and potentially buy at an artificially low price. A question to answer is whether WEC's current trading price of $65.81 reflective of the actual value of the large-cap? Or is it currently undervalued, providing us with the opportunity to buy? Let’s take a look at WEC’s outlook and value based on the most recent financial data to see if there are any catalysts for a price change. View our latest analysis for WEC Energy Group

Is WEC still cheap?

According to my relative valuation model, WEC seems to be currently fairly priced. I’ve used the price-to-equity ratio in this instance because there’s not enough visibility to forecast its cash flows. The stock’s ratio of 21.5x is currently trading slightly below its industry peers’ ratio of 23.2x, which means if you buy WEC today, you’d be paying a fair price for it. And if you believe WEC should be trading in this range, then there isn’t much room for the share price grow beyond what it’s currently trading. Furthermore, WEC’s share price also seems relatively stable compared to the rest of the market, as indicated by its low beta. This may mean it is less likely for WEC to fall lower from natural market volatility, which suggests less opportunities to buy moving forward.

What does the future of WEC look like?

NYSE:WEC Future Profit Sep 16th 17
NYSE:WEC Future Profit Sep 16th 17

Investors looking for growth in their portfolio may want to consider the prospects of a company before buying its shares.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. With profit expected to grow by a double-digit 17.84% over the next couple of years, the outlook is positive for WEC. It looks like higher cash flows is on the cards for the stock, which should feed into a higher share valuation.

What this means for you:

Are you a shareholder? WEC’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 financial strength of the company. Have these factors changed since the last time you looked at WEC? Will you have enough conviction to buy should the price fluctuates below the true value?

Are you a potential investor? If you’ve been keeping an eye on WEC, now may not be the most advantageous time to buy, given it is trading around its fair value. However, the optimistic prospect is encouraging for WEC, which means it’s worth further examining other factors such as the strength of its balance sheet, in order to take advantage of the next price drop.

Price is just the tip of the iceberg. Dig deeper into what truly matters – the fundamentals – before you make a decision on WEC Energy Group. You can find everything you need to know about WEC in the latest infographic research report. If you are no longer interested in WEC Energy Group, you can use our free platform to see my list of over 50 other stocks with a high growth potential.


To help readers see pass the short term volatility of the financial market, we aim to bring you a long-term focused research analysis purely driven by fundamental data. Note that our analysis does not factor in the latest price sensitive company announcements.

The author is an independent contributor and at the time of publication had no position in the stocks mentioned.

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