Klöckner & Co (XTRA:KCO): Is the Steel Distributor’s Strong Share Price Run Still Undervalued?

Klöckner & Co (XTRA:KCO) has quietly turned into one of Germany’s stronger steel distributors this year, with the stock up around 81% year to date and roughly 89% over the past year.

See our latest analysis for Klöckner & Co.

That surge has come as investors warm to the group’s restructuring progress and digitalisation push. A 56.71% 1 month share price return and 89.32% 1 year total shareholder return suggest momentum is still firmly building rather than fading.

If Klöckner & Co’s run has you thinking about what else might surprise to the upside, this could be a good moment to hunt for fast growing stocks with high insider ownership.

With the shares now trading slightly above analyst targets despite recent revenue growth but lingering losses, the key question is whether Klöckner & Co remains undervalued or if the market is already pricing in its digital future.

Most Popular Narrative Narrative: 1% Undervalued

With Klöckner & Co closing at €8.29 against a narrative fair value of €8.35, the story hinges on a modest upside built on improving profitability.

The company's clear shift toward higher-value-added and specialty steel products, illustrated by a record gross profit margin increase from 16.6% to 19.5%, reflects its success in diversifying away from traditional distribution, supporting sustained net margin and EBITDA improvement as global demand for engineered and low-carbon solutions rises.

Read the complete narrative.

Curious how a relatively small valuation gap leans on ambitious revenue growth, margin repair, and a future earnings multiple below today’s industry norm? The full narrative unpacks the profit swing, the required rerating, and the time frame analysts think it all comes together.

Result: Fair Value of $8.35 (ABOUT RIGHT)

Have a read of the narrative in full and understand what's behind the forecasts.

However, persistent European weakness and ongoing steel price volatility could derail the expected margin recovery and push Klöckner & Co’s profit turnaround further out.

Find out about the key risks to this Klöckner & Co narrative.

Another Lens on Value

While the narrative fair value sits close to today’s price, our DCF model paints a harsher picture, with a fair value of €2.79 versus the current €8.29. This implies that Klöckner & Co looks expensive rather than slightly undervalued. Which story do you think better reflects the real risk reward?

Look into how the SWS DCF model arrives at its fair value.

Simply Wall St performs a discounted cash flow (DCF) on every stock in the world every day (check out Klöckner & Co for example). We show the entire calculation in full. You can track the result in your watchlist or portfolio and be alerted when this changes, or use our stock screener to discover 914 undervalued stocks based on their cash flows. If you save a screener we even alert you when new companies match - so you never miss a potential opportunity.

Build Your Own Klöckner & Co Narrative

If you see the story differently, or want to dig into the numbers yourself, you can build a tailored narrative in minutes using Do it your way.

A great starting point for your Klöckner & Co research is our analysis highlighting 2 key rewards and 3 important warning signs that could impact your investment decision.

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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.

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