Mitchells & Butlers plc (LON:MAB), is not the largest company out there, but it saw a significant share price rise of 37% in the past couple of months on the LSE. While good news for shareholders, the company has traded much higher in the past year. As a mid-cap stock with high coverage by analysts, you could assume any recent changes in the company’s outlook is already priced into the stock. However, what if the stock is still a bargain? Let’s take a look at Mitchells & Butlers’s outlook and value based on the most recent financial data to see if the opportunity still exists.

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Is Mitchells & Butlers Still Cheap?

The stock seems fairly valued at the moment according to our valuation model. It’s trading around 8.67% above our intrinsic value, which means if you buy Mitchells & Butlers today, you’d be paying a relatively fair price for it. And if you believe the company’s true value is £2.62, then there isn’t really any room for the share price grow beyond what it’s currently trading. Is there another opportunity to buy low in the future? Since Mitchells & Butlers’s share price is quite volatile, we could potentially see it sink lower (or rise higher) in the future, giving us another chance to buy. This is based on its high beta, which is a good indicator for how much the stock moves relative to the rest of the market.

View our latest analysis for Mitchells & Butlers

What kind of growth will Mitchells & Butlers generate?

Investors looking for growth in their portfolio may want to consider the prospects of a company before buying its shares. Buying a great company with a robust outlook at a cheap price is always a good investment, so let’s also take a look at the company's future expectations. With profit expected to grow by a double-digit 11% over the next couple of years, the outlook is positive for Mitchells & Butlers. It looks like higher cash flow is on the cards for the stock, which should feed into a higher share valuation.

What This Means For You

Are you a shareholder? It seems like the market has already priced in MAB’s positive outlook, with shares trading around its fair value. However, there are also other important factors which we haven’t considered today, such as the track record of its management team. Have these factors changed since the last time you looked at the stock? Will you have enough conviction to buy should the price fluctuates below the true value?