Pitney Bowes (PBI) Could Be 12% Undervalued On Earnings And Dividend Focus

Why Pitney Bowes is Back on Investor Radar Ahead of Earnings

Pitney Bowes (PBI) heads into Wednesday afternoon’s earnings release with two clear focal points for investors: a higher than industry dividend yield and expectations for earnings growth are setting the tone.

Recent trading tells a story of rebuilding confidence. Pitney Bowes shares are at US$17.26, with a year to date share price return of 67.09%. The 1 year total shareholder return of 49.84% and very large 3 year total shareholder return signal momentum that has cooled slightly in the last quarter, as the 90 day share price return declined 3.20%.

Scan how Pitney Bowes compares to other income ideas by running through our hand picked list of 5 dividend fortresses before this earnings update lands.

The share price has already run hard, yet Pitney Bowes still trades below both analyst targets and some intrinsic value estimates. Is that gap a genuine cushion or a value trap in disguise?

Most Popular Narrative: 12% Undervalued

Pitney Bowes is currently at $17.26 while the most followed narrative pegs fair value at $19.56. This frames today’s rally as still leaving a valuation gap on the table.

The analysts have a consensus price target of $19.56 for Pitney Bowes based on their expectations of its future earnings growth, profit margins and other risk factors.

However, there is a degree of disagreement amongst analysts, with the most bullish reporting a price target of $22.0, and the most bearish reporting a price target of just $17.3.

See why 11 investors see Pitney Bowes as 12% undervalued.

Result: Fair Value of $19.56 (UNDERVALUED)

Still, the Pitney Bowes story can change quickly if physical mail volumes keep shrinking faster than expected or if high debt and refinancing needs squeeze future earnings.

Find out about the key risks to this Pitney Bowes narrative.

Next Steps

If this Pitney Bowes setup feels finely balanced to you, that is the point. It is worth weighing the evidence yourself before the next move. To size up both the upside and the concerns side by side, start with the 4 key rewards and 3 important warning signs.

Looking for more Pitney Bowes style investment ideas?

Do not stop your research with Pitney Bowes alone. Exploring fresh watchlist ideas from different angles can help sharpen your judgment before the next earnings wave.

• Target income resilience by scanning companies with established payouts and financial strength through our 5 dividend fortresses.
• Look for quality businesses that trade below what their fundamentals may justify by reviewing the 29 high quality undervalued stocks.
• Spot financially sound operators that could be flying under the radar by working through the list of solid balance sheet and fundamentals (24 results).

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