EN: Diverging Price Views And Cautious 2025 Outlook Will Shape Confidence

We raise our Bouygues fair value estimate slightly to EUR 47.28 from EUR 47.15, reflecting analysts' modestly higher long term earnings expectations and a lower perceived risk profile, despite mixed price target revisions across the Street.

Analyst Commentary

Sell side views on Bouygues remain divided, with recent target and rating changes underscoring a balance of optimism on medium term growth prospects and caution around execution risks and valuation.

Bullish Takeaways

• Bullish analysts highlight the recent increase in upside potential, with one major bank lifting its target to EUR 56, which implies material re rating capacity if execution on the current strategy remains on track.
• Upgrades from prior negative stances to more neutral ratings suggest consensus is shifting away from a downside centric view toward a more balanced outlook, supported by improved earnings visibility.
• The move to higher price targets from previously conservative levels indicates growing confidence that Bouygues can monetize its diversified portfolio and unlock further value through operational efficiencies.
• Limited perceived downside from current valuation levels is seen as a support for the share price, reducing the risk of significant de rating absent an external shock or major execution misstep.

Bearish Takeaways

• Bearish analysts maintain restrained price targets in the high 30s, which signals concerns that near term upside is capped relative to current levels and that the stock may already discount much of the expected improvement.
• The persistence of Equal Weight stances, even after modest target moves, reflects skepticism that Bouygues can significantly outperform sector peers on growth or margin expansion in the short to medium term.
• Cautious views point to ongoing execution risk across core business lines, with limited tolerance for delays or cost overruns that could pressure free cash flow and constrain valuation upside.
• Divergent targets, ranging from the high 30s to the mid 50s, signal uncertainty around the sustainability of earnings growth and raise the risk that expectations may need to be reset if operating trends soften.

What's in the News

• Bouygues revised its 2025 guidance, now expecting only a slight increase in current operating profit from activities versus 2024 and sales to be slightly up at constant exchange rates, but close to 2024 levels as reported due to currency headwinds, compared with prior guidance for slight growth in both sales and COPA. This signals a more cautious outlook amid FX volatility (company guidance).
• The company highlighted the impact of US dollar fluctuations on reported sales. It underlined that currency movements could offset underlying operational growth even as management continues to target incremental profit improvement (company guidance).
• A board meeting is scheduled for November 4, 2025, with an agenda to approve the financial statements for the first nine months of 2025. This will be an important checkpoint for confirming whether the group remains on track with its updated guidance (board meeting notice).

Valuation Changes

• The fair value estimate has risen slightly to €47.28 from €47.15, reflecting a modest upward revision in long-term earnings assumptions.
• The discount rate has fallen slightly to 10.45 percent from 10.52 percent, indicating a marginally lower perceived risk profile.
• Revenue growth is reported at 1.90 percent, unchanged from the previous figure, signaling virtually stable top-line expectations.
• The net profit margin is reported at 2.57 percent, unchanged from the previous figure, suggesting essentially stable expected profitability.
• The future P/E is reported at 16.25x, unchanged from the previous figure, leaving the implied valuation multiple essentially stable.