The Seven Group Holdings (ASX: SVW) share price had its ups and downs on Monday but finished the trading day in positive territory. Shares in the ASX agribusiness closed 0.39% higher at $18.03.
It's been a challenging year for the Seven Group share price, down 25.3% over the past 12 months.
Credit Suisse analysts believe it's undervalued at current levels, saying that the potential for further bad news has already been priced in for the stock.
With the company submitting its earnings report later this month, let's find out why the Credit Suisse brokers are bullish on this ASX 200 share.
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Credit Suisse analyst rating
As reported by The Australian, Credit Suisse analyst Andrew Hodge believes that the company is trading lower than it should.
A note addressed to investors explained the broker's stance:
We believe SVW remains materially undervalued, but are also cognisant the very near term is unlikely to produce any re-rating catalysts. Although recent share price performance suggests a broad expectation of prospective bad news already exists within the market.
Credit Suisse reduced its consensus price target for Seven Group Holdings, but the forecast still sees it considerably undervalued right now. The broker's consensus price is $22.15, implying a potential 22.91% upside at the time of writing.
Hodge predicted a higher share price to materialise over the next 12 months as Seven's Coates and WesTrac businesses were expected to perform strongly.
He added that Seven Group Holdings would likely provide investors with a "conservative" FY23 outlook when it reports on 24 August. The broker expects that to have a knock-on effect on the company's share price.
Despite some recent share price weakness, we believe lower than consensus guidance will result in modest share price weakness from current levels.
Other analysts disagree on the fair value of the ASX 200 share. Joe Wright of Airlie Funds Management said last week it was trading at "a price we believe is more than fair".
Seven Group Holdings share price snapshot
The Seven Group Holdings share price is down 18.93% year to date. It's trading significantly below the S&P/ASX 200 Index (ASX: XJO), which is 6.92% lower over the same period.
Seven Group Holding's market capitalisation is $6.52 billion.
