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If you are wondering whether Iveco Group's strong share price makes it expensive or still offers value, this breakdown will help you put the current price in context.
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Iveco Group's shares recently closed at €18.89, with returns of 0.3% over the past week, 0.7% over the past month, 0.3% year to date and 88.5% over the past year, plus a 170.3% return over three years.
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Recent coverage around Iveco Group has focused on its positioning within the capital goods sector and how investors are reacting to its execution on business priorities. This backdrop helps explain why the share price performance has attracted fresh attention from both existing shareholders and new investors.
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On our valuation checks, Iveco Group scores 3 out of 6. In this article we look at what different valuation approaches say about the stock today, then finish with a way to think about value that goes beyond any single model.
Approach 1: Iveco Group Discounted Cash Flow (DCF) Analysis
A Discounted Cash Flow, or DCF, model estimates what a company might be worth by projecting its future cash flows and then discounting those back to today using a required rate of return.
For Iveco Group, the model used is a 2 Stage Free Cash Flow to Equity approach. The latest twelve month free cash flow is reported as a loss of €366.5m. Analysts provide explicit free cash flow estimates out to 2027, with Simply Wall St extending those projections out to 2035 using gradual growth assumptions.
Within this framework, free cash flow is projected at €558.9m in 2026 and €611.4m in 2027, reaching €865.4m by 2035. Each of these future amounts is discounted back to today and combined with a terminal value to arrive at an estimated intrinsic value of €18.64 per share.
Compared with the recent share price of €18.89, the DCF suggests Iveco Group trades at around a 1.3% premium to this estimate, which is effectively in the fair value range given normal modelling uncertainty.
Result: ABOUT RIGHT
Iveco Group is fairly valued according to our Discounted Cash Flow (DCF) , but this can change at a moment's notice. Track the value in your watchlist or portfolio and be alerted on when to act.
Approach 2: Iveco Group Price vs Earnings
For profitable companies, the P/E ratio is often a useful yardstick because it links what you pay directly to the earnings the business is currently generating. It gives you a quick sense of how many years of earnings the market is willing to pay for at today's price.
What counts as a "normal" P/E depends on how the market views the company's growth potential and risk profile. Higher expected growth or lower perceived risk usually support a higher P/E, while lower growth or higher risk typically go with a lower multiple.
Iveco Group currently trades on a P/E of 18.63x. That sits below the Machinery industry average P/E of 24.75x and below the peer group average of 29.79x. Simply Wall St's Fair Ratio for Iveco Group is 36.65x, which is their proprietary view of what the P/E might be, given factors such as earnings growth, industry, profit margins, market cap and company specific risks.
The Fair Ratio can be more informative than simple peer or industry comparisons because it adjusts for those company specific characteristics instead of assuming all Machinery stocks should trade on the same multiple. With the Fair Ratio above the current 18.63x P/E, this framework points to the shares looking undervalued on earnings.
Result: UNDERVALUED
P/E ratios tell one story, but what if the real opportunity lies elsewhere? Discover 1445 companies where insiders are betting big on explosive growth .
Upgrade Your Decision Making: Choose your Iveco Group Narrative
Earlier we mentioned that there is an even better way to understand valuation. Narratives let you turn your view of Iveco Group into a simple story that links its business direction to a financial forecast and then to a fair value, all within the Community page on Simply Wall St where millions of investors share their work. You might see one Narrative that builds around the analysts' fair value of €19.88 based on assumptions for revenue, earnings and margins, and another that is more cautious with a lower fair value. By comparing each Narrative's fair value to the current price you can judge whether the stock looks expensive or cheap on that story, then watch those Narratives update automatically as new news, earnings or deal details such as the Tata Motors transaction flow through.
Do you think there's more to the story for Iveco Group? Head over to our Community to see what others are saying!
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.
Companies discussed in this article include IVG.MI .
Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team@simplywallst.com
