While Frasers Property Limited (SGX:TQ5) might not be the most widely known stock at the moment, it maintained its current share price over the past couple of month on the SGX, with a relatively tight range of S$1.04 to S$1.13. However, does this price actually reflect the true value of the mid-cap? Or is it currently undervalued, providing us with the opportunity to buy? Let's take a look at Frasers Property's outlook and value based on the most recent financial data to see if there are any catalysts for a price change.

See our latest analysis for Frasers Property

What is Frasers Property worth?

The share price seems sensible at the moment according to my price multiple model, where I compare the company's price-to-earnings ratio to the industry average. In this instance, I've used the price-to-earnings (PE) ratio given that there is not enough information to reliably forecast the stock's cash flows. I find that Frasers Property's ratio of 6.32x is trading slightly below its industry peers' ratio of 10.64x, which means if you buy Frasers Property today, you'd be paying a decent price for it. And if you believe that Frasers Property should be trading at this level in the long run, then there's not much of an upside to gain over and above other industry peers. Furthermore, it seems like Frasers Property's share price is quite stable, which means there may be less chances to buy low in the future now that it's priced similarly to industry peers. This is because the stock is less volatile than the wider market given its low beta.

Can we expect growth from Frasers Property?

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. Though in the case of Frasers Property, it is expected to deliver a highly negative earnings growth in the next few years, which doesn't help build up its investment thesis. It appears that risk of future uncertainty is high, at least in the near term.

What this means for you:

Are you a shareholder? Currently, TQ5 appears to be trading around industry price multiples, but given the uncertainty from negative returns in the future, this could be the right time to de-risk your portfolio. Is your current exposure to the stock beneficial for your total portfolio? And is the opportunity cost of holding a negative-outlook stock too high? Before you make a decision on TQ5, take a look at whether its fundamentals have changed.

Are you a potential investor? If you've been keeping tabs on TQ5 for a while, now may not be the most advantageous time to buy, given it is trading around industry price multiples. This means there's less benefit from mispricing. In addition to this, the negative growth outlook increases the risk of holding the stock. However, there are also other important factors we haven't considered today, which can help crystallize your views on TQ5 should the price fluctuate below the industry PE ratio.

So while earnings quality is important, it's equally important to consider the risks facing Frasers Property at this point in time. To help with this, we've discovered 3 warning signs (2 can't be ignored!) that you ought to be aware of before buying any shares in Frasers Property.

If you are no longer interested in Frasers Property, 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.