adidas And 2 Other Value Stocks On The German Exchange Estimated Below Intrinsic Value

As the German market navigates a mix of economic signals, including a modest rise in industrial output and fluctuating trade balances, investors are keenly observing opportunities for value stocks. Amid this complex environment, identifying undervalued stocks like adidas becomes crucial for those looking to invest in companies trading below their intrinsic value.

Top 10 Undervalued Stocks Based On Cash Flows In Germany

Name	Current Price	Fair Value (Est)	Discount (Est)
technotrans (XTRA:TTR1)	€16.20	€30.34	46.6%
Bertrandt (XTRA:BDT)	€23.90	€42.58	43.9%
M1 Kliniken (XTRA:M12)	€14.50	€23.69	38.8%
ecotel communication ag (XTRA:E4C)	€13.60	€21.95	38%
Verbio (XTRA:VBK)	€17.12	€29.89	42.7%
RENK Group (DB:R3NK)	€24.955	€43.16	42.2%
MTU Aero Engines (XTRA:MTX)	€267.40	€494.18	45.9%
Dr. Hönle (XTRA:HNL)	€16.80	€28.89	41.8%
Deutsche Pfandbriefbank (XTRA:PBB)	€4.886	€8.05	39.3%
Vectron Systems (XTRA:V3S)	€11.15	€17.58	36.6%

Click here to see the full list of 22 stocks from our Undervalued German Stocks Based On Cash Flows screener.

Here we highlight a subset of our preferred stocks from the screener.

adidas (XTRA:ADS)

Overview: adidas AG, along with its subsidiaries, designs, develops, produces, and markets athletic and sports lifestyle products across Europe, the Middle East, Africa, North America, Greater China, the Asia-Pacific region, and Latin America with a market cap of €38.99 billion.

Operations: The company's revenue segments are as follows: Greater China: €3.26 billion, Latin America: €2.39 billion, and North America: €5.07 billion.

Estimated Discount To Fair Value: 25.3%

adidas is trading 25.3% below its estimated fair value of €292.33, with a current price of €218.4, indicating it may be undervalued based on cash flows. The company has shown strong earnings growth, reporting Q2 net income of €190 million compared to €84 million a year ago and raising its full-year guidance for 2024. Forecasts indicate high annual profit growth (40.7%) and revenue growth (8.3%), outpacing the German market averages.

• Our earnings growth report unveils the potential for significant increases in adidas' future results.
• Navigate through the intricacies of adidas with our comprehensive financial health report here.

MTU Aero Engines (XTRA:MTX)

Overview: MTU Aero Engines AG develops, manufactures, markets, and maintains commercial and military aircraft engines as well as aero-derivative industrial gas turbines globally, with a market cap of €14.39 billion.

Operations: The company generates revenue through its Commercial Maintenance Business (MRO) segment, which accounts for €4.45 billion, and its Commercial and Military Engine Business (OEM) segment, contributing €1.32 billion.

Estimated Discount To Fair Value: 45.9%

MTU Aero Engines (€267.4) is trading significantly below its estimated fair value of €494.18, highlighting potential undervaluation based on cash flows. Recent earnings show strong performance with H1 sales of €3.39 billion, up from €3.09 billion a year ago, and net income rising to €285 million from €255 million. Forecasts predict revenue growth at 12.2% per year and earnings growth at 34.15% per year, outpacing the German market averages.

• According our earnings growth report, there's an indication that MTU Aero Engines might be ready to expand.
• Delve into the full analysis health report here for a deeper understanding of MTU Aero Engines.

SAP (XTRA:SAP)

Overview: SAP SE, together with its subsidiaries, provides applications, technology, and services worldwide and has a market cap of approximately €228.59 billion.

Operations: SAP SE generates revenue primarily from its Applications, Technology & Services segment, which amounted to €32.54 billion.

Estimated Discount To Fair Value: 31.9%

SAP (€195.98) is trading 31.9% below its estimated fair value of €287.83, indicating potential undervaluation based on cash flows. Earnings are forecast to grow significantly at 37.88% per year, outpacing the German market's average growth rate of 19.7%. Recent client announcements, such as Xerox and Answerthink adopting SAP's cloud solutions, underline strong demand for its offerings despite a lower-than-benchmark return on equity forecast (16.4%).

• Upon reviewing our latest growth report, SAP's projected financial performance appears quite optimistic.
• Click here and access our complete balance sheet health report to understand the dynamics of SAP.

Key Takeaways

• Embark on your investment journey to our 22 Undervalued German Stocks Based On Cash Flows selection here.
• Already own these companies? Link your portfolio to Simply Wall St and get alerts on any new warning signs to your stocks.
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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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