Is It Too Late To Consider Buying Icahn Enterprises L.P. (NASDAQ:IEP)?

Let's talk about the popular Icahn Enterprises L.P. (NASDAQ:IEP). The company's shares led the NASDAQGS gainers with a relatively large price hike in the past couple of weeks. As a large-cap stock, it seems odd Icahn Enterprises is not more well-covered by analysts. Although, there is more of an opportunity for mispricing in stocks with low coverage, which can be a good thing. So, could the stock still be trading at a low price relative to its actual value? Today I will analyse the most recent data on Icahn Enterprises’s outlook and valuation to see if the opportunity still exists.

View our latest analysis for Icahn Enterprises

What Is Icahn Enterprises Worth?

Good news, investors! Icahn Enterprises is still a bargain right now. My valuation model shows that the intrinsic value for the stock is $53.88, but it is currently trading at US$32.58 on the share market, meaning that there is still an opportunity to buy now. Another thing to keep in mind is that Icahn Enterprises’s share price may be quite stable relative to the rest of the market, as indicated by its low beta. This means that if you believe the current share price should move towards its intrinsic value over time, a low beta could suggest it is not likely to reach that level anytime soon, and once it’s there, it may be hard to fall back down into an attractive buying range again.

What does the future of Icahn Enterprises 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. However, with an expected decline of -6.2% in revenues over the next year, short term growth isn’t a driver for a buy decision for Icahn Enterprises. This certainty tips the risk-return scale towards higher risk.

What This Means For You

Are you a shareholder? Although IEP is currently undervalued, the negative outlook does bring on some uncertainty, which equates to higher risk. Consider whether you want to increase your portfolio exposure to IEP, or whether diversifying into another stock may be a better move for your total risk and return.

Are you a potential investor? If you’ve been keeping tabs on IEP for some time, but hesitant on making the leap, I recommend you dig deeper into the stock. Given its current undervaluation, now is a great time to make a decision. But keep in mind the risks that come with negative growth prospects in the future.

In light of this, if you'd like to do more analysis on the company, it's vital to be informed of the risks involved. Every company has risks, and we've spotted 3 warning signs for Icahn Enterprises (of which 2 make us uncomfortable!) you should know about.

If you are no longer interested in Icahn Enterprises, you can use our free platform to see our list of over 50 other stocks with a high growth potential.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.

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.

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