ICL Group (NYSE:ICL): Assessing Valuation After Costly Israeli Supreme Court Water Fee Ruling

ICL Group (NYSE:ICL) is back in focus after the Israeli Supreme Court ruled it must pay water fees on Dead Sea wells retroactively, adding a fresh legal and financial wrinkle to the story.

See our latest analysis for ICL Group.

The ruling lands after a choppy stretch for the stock, with a 30 day share price return of minus 7.14 percent and a 90 day share price return of minus 17.83 percent. The 5 year total shareholder return of 32.8 percent shows the longer term story is still intact, although momentum has clearly cooled.

If this legal setback has you rethinking where you want risk in your portfolio, it could be a good time to explore fast growing stocks with high insider ownership.

With ICL still trading below analyst targets despite the looming water fee hit, investors face a key question: is the market overreacting to a one off legal charge, or fairly discounting slower growth ahead?

Most Popular Narrative Narrative: 24.7% Undervalued

With the popular narrative putting ICL Group's fair value well above the last close at $5.07, the valuation case rests on a specific growth and margin path.

The analysts have a consensus price target of $5.28 for ICL Group 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 $6.0, and the most bearish reporting a price target of just $4.5.

Read the complete narrative.

Curious how a slower revenue trajectory, rising discount rate and higher future margins can still justify a richer valuation multiple than today? The narrative spells out the earnings ramp and profit profile it thinks will bridge that gap, plus the valuation multiple it assumes the market will pay for those 2028 numbers.

Result: Fair Value of $6.74 (UNDERVALUED)

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

However, sustained logistics disruptions or weaker-than-expected specialty phosphate demand could squeeze margins and derail the growth path that underpins that undervaluation thesis.

Find out about the key risks to this ICL Group narrative.

Build Your Own ICL Group Narrative

If you are not fully convinced by this perspective, or would rather dig into the numbers yourself, you can build a custom view in just a few minutes, Do it your way.

A great starting point for your ICL Group research is our analysis highlighting 2 key rewards and 1 important warning sign 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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