A Look At UGI (UGI) Valuation After Recent Share Price Momentum And Earnings Reassessment

Why UGI is on investors’ radar today

Without a specific news headline driving attention, UGI (NYSE:UGI) is drawing interest as investors reassess this diversified energy distributor’s recent share performance, fundamentals, and valuation signals, using the latest return and earnings data as a reference point.

See our latest analysis for UGI.

UGI’s share price at US$37.75 sits against a backdrop of a 90 day share price return of 16.66%, while its 1 year total shareholder return of 38.94% hints at improving momentum after a more modest 3 year total shareholder return of 9.41% and 5 year total shareholder return of 29.88%.

If UGI’s recent recovery has you thinking about where else capital could work harder, this could be a good moment to broaden your search with fast growing stocks with high insider ownership.

With UGI trading at US$37.75 alongside an indicated intrinsic discount and analyst price target gap, the key question is whether the recent run has more room to go or whether the market already prices in future growth.

Most Popular Narrative Narrative: 14.2% Undervalued

With UGI last closing at US$37.75 against a narrative fair value of US$44, the story centers on whether current earnings power justifies that gap.

Divestiture of non-core, low-margin LPG assets and redeployment of proceeds into higher-return, regulated utility and energy services businesses enable greater financial flexibility, prudent deleveraging, and improved overall earnings quality.

Read the complete narrative.

Want to see what is behind that earnings quality claim? The narrative leans on higher regulated returns, richer margins, and a future earnings multiple that tells a very different story compared with today’s price.

Result: Fair Value of $44 (UNDERVALUED)

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

However, there are still questions around long term LPG demand erosion in Europe and ongoing customer attrition at AmeriGas, which could challenge this earnings quality story.

Find out about the key risks to this UGI narrative.

Build Your Own UGI Narrative

If this story does not quite fit your view, or you would rather test the numbers yourself, you can build a tailored thesis in minutes with Do it your way.

A great starting point for your UGI research is our analysis highlighting 5 key rewards and 1 important warning sign that could impact your investment decision.

Looking for more investment ideas?

If UGI is on your radar, do not stop there. Broaden your watchlist with focused stock ideas that match the kind of opportunities you care about most.

• Target potential mispricing by scanning these 880 undervalued stocks based on cash flows that may offer a gap between business quality and current market expectations.
• Tap into growth themes by sorting through these 25 AI penny stocks that are tied to advances in artificial intelligence and related technologies.
• Strengthen your income focus by checking these 14 dividend stocks with yields > 3% that could complement capital growth with regular cash payouts.

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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