Should You Buy Kier Group plc (LON:KIE) Now?

Kier Group plc (LON:KIE) has been a rollercoaster ride for investors over the past few months, with its stock price fluctuating between UK£1.55 and UK£1.17. The question on everyone's mind is whether the current trading price of UK£1.17 accurately reflects the company's true value or if it presents a buying opportunity. Let's delve into Kier Group's outlook and value based on the most recent financial data to see if there are any catalysts for a price change.

First, let's look at the company's price-to-earnings (PE) ratio. Kier Group's PE ratio is 10.17x, slightly below the industry average of 10.72x. This suggests that the stock is trading at a decent price compared to its peers. However, if you believe that Kier Group should be trading at this level in the long run, there’s not much of an upside to gain over and above other industry peers. This also means that the stock might be undervalued relative to its industry peers.

Kier Group's beta, a measure of share price volatility, is high. This means its price movements will be exaggerated relative to the rest of the market. If the market is bearish, the company’s shares will likely fall by more than the rest of the market, providing a prime buying opportunity. This high beta indicates that the stock is more volatile and could be undervalued during market downturns.



Kier Group has a market cap of 526.98 million as of April 4, 2025. Its market cap has decreased by -11.64% in one year. This decrease could suggest that the market is undervaluing the company, but it could also be due to other factors such as market conditions or company-specific issues.

Profit is expected to grow by 55% over the next couple of years, which indicates a bright future for Kier Group. Higher cash flow is on the cards for the stock, which should feed into a higher share valuation. This growth potential suggests that the stock might be undervalued given its expected earnings growth.

Kier Group has announced a dividend of £0.02, which is an increase from previous periods. This suggests that the company is generating enough cash to pay dividends, which could be attractive to income-focused investors. However, the dividend track record is unstable, which could be a risk factor.

Kier Group is trading at 43.6% below our estimate of its fair value. This significant discount suggests that the stock might be undervalued. Additionally, earnings are forecast to grow 17.09% per year, and earnings have grown 73.2% per year over the past 5 years. These growth metrics support the idea that the stock might be undervalued.

Analysts are in good agreement that the stock price will rise by 92.6%. This consensus suggests that the market might be undervaluing the stock, and there is potential for significant upside.

In summary, the key financial indicators such as the PE ratio, beta, earnings growth, and analyst consensus suggest that Kier Group plc might be undervalued. The high beta indicates that the stock could be a good buying opportunity during market downturns, and the expected earnings growth supports the idea that the stock might be undervalued. However, the unstable dividend track record and the decrease in market capitalization are risk factors to consider.