Mitchells & Butlers Share Price Forecast July 2021 – Time to Buy MAB?

Mitchells & Butlers PLC (LSE: MAB) has caught the attention of investors due to the significant share price movement it experienced in recent months. It rose to highs of £3.32 before falling to lows of £2.82. The concerns investors have are mainly two: is the current trading price of Mitchells & Butlers PLC reflect its actual value? Or is it currently undervalued allowing them to buy the shares?

Mitchells & Butlers PLC – Technical Analysis

According to Mitchells & Butlers PLC’s financial statement, the company’s market cap is at £1.723 billion with total assets worth £5.062 billion. Revenues for 2020 were at £1.48 billion with a profit margin of -7.59%. MAB shares are valued at £303.4 at the time of writing with an uptrend of 1.13%.

Moving over to the technical side, a look at oscillators such as Ultimate Oscillator (7, 14, 28)(46.5), Bull Bear Power(19.3), Williams Percent Range (14)(−5.9) and Stochastic RSI Fast (3, 3, 14, 14)(97.1) reveals that they are pointing towards neutral. The majority of moving averages, such as Hull Moving Average (9)(300.0), Volume Weighted Moving Average (20)(288.9) and others are pointing towards buying.

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Recent Developments

Mitchells & Butlers’ CEO & Director Philip Urban made a single transaction of an insider purchase valued at £197,000, of shares priced at £2.10 each. Insiders were buying but not selling shares for the last 12 months. According to various statistics, insiders at Mitchells & Butlers’ own about 0.1% of the stock valued at £2.3 million. However, there are indications that they have an indirect interest via a corporate structure that is not readily evident.

Should You Buy MAB Shares?

Mitchells & Butlers’ share price is quite volatile and can sink lower or rise higher in the future, giving investors a chance to buy. Investors have to consider the prospects of a company before buying its shares if they are looking for growth in their portfolio. For instance, buying a good company at a cheap price with a robust outlook doesn’t guarantee a good investment. Revenues for the company are expected to double over the next two years, reflecting an optimistic future outlook for the company. The top-line growth can lead to stronger cash flows, feeding into a higher share value if the expense does not increase by the same rate.

So it may not be the most advantageous time to buy MAB for investors, given that the shares are trading around their fair value. However, investors can dive deeper into factors such as the strength of its balance sheet to take advantage of the next price drop.

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