Colruyt Group (ENXTBR:COLR): Assessing Valuation as Shares Trade Below Industry Averages

Colruyt Group (ENXTBR:COLR) has drawn attention from investors after recent market moves. The company’s latest performance offers a fresh angle to assess its valuation and prospects, especially given its returns this past year.

See our latest analysis for Colruyt Group.

Colruyt Group’s share price has slipped roughly 15% in the last month, reflecting shifting sentiment as broader market jitters set in. While some may focus on the recent slide, what stands out is the strong 57% total shareholder return achieved over three years, even though the last twelve months saw a 21% total return decline. Overall, momentum has faded, but the company’s long-term record offers perspective beyond short-term price moves.

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With shares now trading at a notable discount to analyst targets and modest growth in revenue and net income, the question is whether Colruyt Group is an undervalued pick or if investors are already factoring in all of its future upside.

Price-to-Earnings of 11.7x: Is it justified?

The latest data shows Colruyt Group trades at a price-to-earnings ratio of 11.7x, which is well below both industry and peer averages. At a last close of €32.32, the market is pricing in lower earnings expectations compared to similar consumer retail companies in Europe.

The price-to-earnings (P/E) ratio measures how much investors are willing to pay for each euro of the company’s earnings. For a staple sector player like Colruyt Group, this multiple serves as a key indicator of market sentiment about its future profitability.

Colruyt Group stands out with its 11.7x P/E ratio, a level notably lower than the European Consumer Retailing industry average of 18x and the peer average of 23.4x. This suggests investors may be underestimating Colruyt’s profit potential or are already pricing in a conservative outlook for growth. If market confidence improves or earnings increase, the stock might move closer to industry norms.

See what the numbers say about this price — find out in our valuation breakdown.

Result: Price-to-Earnings of 11.7x (UNDERVALUED)

However, slow revenue growth and persistent market uncertainty could challenge the view that Colruyt shares are materially undervalued in the near term.

Find out about the key risks to this Colruyt Group narrative.

Another View: Discounted Cash Flow Valuation

While Colruyt Group appears undervalued based on profit-based multiples, our DCF model paints an even clearer picture. The shares trade around €32.32, but the DCF model suggests a fair value near €61.37. This means they are valued at nearly half of the estimated intrinsic value. Does the market perceive risks that others are overlooking?

Look into how the SWS DCF model arrives at its fair value.

Simply Wall St performs a discounted cash flow (DCF) on every stock in the world every day (check out Colruyt Group for example). We show the entire calculation in full. You can track the result in your watchlist or portfolio and be alerted when this changes, or use our stock screener to discover undervalued stocks based on their cash flows. If you save a screener we even alert you when new companies match - so you never miss a potential opportunity.

Build Your Own Colruyt Group Narrative

If you’re looking for a different perspective or want to uncover insights on your own terms, you can craft your own analysis from scratch in just a few minutes. Do it your way

A great starting point for your Colruyt Group research is our analysis highlighting 3 key rewards and 2 important warning signs that could impact your investment decision.

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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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