What Does Proximus’s 43% 2025 Rally Mean for Investors After Market Optimism?

If you are watching Proximus and wondering what to do next, you are not alone. With a share price that just closed at 7.3, investors have every reason to re-examine the stock’s direction. Over the last week, Proximus slipped by 0.9%, but that comes after a solid 1.0% climb in the last month and an impressive year-to-date surge of 43.3%. Looking back over the past year, the stock is up 17.0%, a stark contrast to where things stood five years ago with a drop of 37.4% over that period.

What is driving this turnaround? Recent market shifts have played a part, with analysts suggesting that improved sentiment around telecoms, combined with ongoing sector restructuring, has meant investors are giving companies like Proximus another look. This renewed optimism could be a signal that risk perceptions in the sector are changing and perhaps that potential for growth is on the rise again.

Now, if you are the kind of investor who cares about getting in at the right value, here is where it gets interesting. By a standard valuation checklist, Proximus currently earns a score of 4 out of 6 for being undervalued. That certainly catches the eye, especially if you are tracking opportunities in European telecoms stocks. Different valuation approaches can give you different answers, of course, and in the next section, we will dig into how Proximus stacks up on the usual metrics before exploring whether there is an even better way to think about value for this company.

Why Proximus is lagging behind its peers

Approach 1: Proximus Discounted Cash Flow (DCF) Analysis

The Discounted Cash Flow (DCF) model aims to estimate the value of a company by forecasting its future cash flows and discounting them back to today's value. This approach captures both what a company is generating now and what it might deliver in the years ahead, translated into today’s money using a required rate of return.

For Proximus, the latest reported Free Cash Flow is €209 million. Looking ahead, analysts project strong growth and estimate Free Cash Flow will climb to about €420 million by 2026. From that point, long-term projections forecast cash flow rising in the following years, reaching over €1.2 billion by 2034. However, the further out these projections go, the more they rely on extrapolation rather than direct analyst estimates.

Based on these forecasts and the DCF method, the model calculates an intrinsic value for Proximus of €52.26 per share. With shares currently trading at €7.30, this suggests the stock is about 86% undervalued compared to its intrinsic value according to this model.

Result: UNDERVALUED

Head to the Valuation section of our Company Report for more details on how we arrive at this Fair Value for Proximus.

Our Discounted Cash Flow (DCF) analysis suggests Proximus is undervalued by 86.0%. Track this in your watchlist or portfolio, or discover more undervalued stocks.

Approach 2: Proximus Price vs Earnings (PE Ratio)

For profitable companies like Proximus, the Price-to-Earnings (PE) ratio is a classic and widely used gauge of value. It’s particularly meaningful because it tells investors how much they are paying for each euro of current earnings, which is an essential consideration when the company is generating consistent profits.

However, what counts as a “fair” PE ratio can shift depending on how quickly the company is expected to grow, what risks it faces, and how reliable its earnings are. Generally, higher growth and more stable cash flows can justify a higher PE, while uncertain prospects or added risks might mean a lower one is warranted.

Proximus currently trades on a PE ratio of 4.1x. For context, the European telecom industry average is 17.0x, and direct peers average an even higher 40.2x. Simply Wall St’s proprietary “Fair Ratio” takes this a step further. Instead of just comparing with peers, it analyzes data that accounts for the company’s own growth rate, profit margins, market capitalization, and specific risks, delivering a uniquely tailored benchmark.

This makes the Fair Ratio a better tool than the simple industry or peer averages, offering a more complete picture of what Proximus should be worth using its own fundamentals rather than just its sector’s. Comparing Proximus’s actual PE of 4.1x to its Fair Ratio allows investors to judge if the shares are mispriced, based on all the relevant factors in one place.

Result: UNDERVALUED

PE ratios tell one story, but what if the real opportunity lies elsewhere? Discover companies where insiders are betting big on explosive growth.

Upgrade Your Decision Making: Choose your Proximus Narrative

Earlier we mentioned that there's an even better way to understand valuation, so let's introduce you to Narratives. A Narrative is simply your own story, your judgement and perspective behind the numbers, combining your estimates for Proximus’s fair value, future revenue, earnings, and profit margins. Instead of relying only on traditional metrics, Narratives connect the company’s outlook and unique circumstances directly to a specific financial forecast and resulting fair value, making your reasoning transparent and actionable.

On Simply Wall St’s Community page, Narratives are an easy, accessible, and interactive tool used by millions of investors. They help you quickly see whether your personal fair value is above or below the latest share price, so you can decide if now is the time to buy, hold, or sell. Narratives are automatically updated any time new data, news, or earnings reports come in, so your outlook always stays current.

For example, some investors see Proximus’s solid dividend yield and government backing, leading them to assign a fair value as high as €17.13 per share. Others, concerned by competition and margin pressure, calculate a much lower fair value of €8.18. That’s the beauty of Narratives: you can weigh the facts, share your view, and see how it stacks up against the crowd, all in one place.

Do you think there's more to the story for Proximus? Create your own Narrative to let the Community know!

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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