TT Electronics plc (TTG) is currently undervalued by the market.
- Analyst Price Targets Indicate Potential Upside:
- The average twelve-month stock price forecast for TT Electronics is GBX 228.33, with a high estimate of GBX 275.00 and a low estimate of GBX 100.001.
- This represents a significant upside from the current price, with an average price target representing an 80.04% increase1.
- Discounted Cash Flow Analysis Suggests Undervaluation:
- Using a 2-stage free cash flow to equity model, TTG's estimated fair value is UK£2.01, with the current share price suggesting the stock is potentially 25% undervalued2.
- A similar analysis using a 2-stage free cash flow to equity model estimates a fair value of UK£2.12, indicating a 28% undervaluation based on the current share price3.
- Dividend Yield and Growth Prospects:
- TTG offers a dividend yield of 3.51%, which is considered strong, especially in comparison to other dividend-paying stocks4.
- The company has announced a dividend of GBX 2.25 for the upcoming quarter, which represents a yield of 1.62% and is payable on October 15th5.
- Market Sentiment and Analyst Ratings:
- The consensus rating for TTG is a "Buy," with analysts citing an expected growth in earnings and revenue, as well as a forecasted increase in return on equity6.
- Despite this positive outlook, the stock has faced operational challenges, leading to a recent price drop and a trimmed outlook7.
In conclusion, TTG's analyst price targets and discounted cash flow analyses suggest that the stock is undervalued by the market. The company's dividend yield and growth prospects also support this view. However, investors should consider the operational challenges and market sentiment before making an investment decision.