Have Investors Priced In Dassault Aviation SA's (EPA:AM) Growth?

May 23, 2018
  •  Updated
October 04, 2022
ENXTPA:AM
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Dassault Aviation SA (ENXTPA:AM) saw a significant share price rise of over 20% in the past couple of months on the ENXTPA. With many analysts covering the large-cap stock, we may expect any price-sensitive announcements have already been factored into the stock’s share price. However, what if the stock is still a bargain? Today I will analyse the most recent data on Dassault Aviation’s outlook and valuation to see if the opportunity still exists. See our latest analysis for Dassault Aviation

What's the opportunity in Dassault Aviation?

Good news, investors! Dassault Aviation is still a bargain right now. In this instance, I’ve used the price-to-equity (PE) ratio given that there is not enough information to reliably forecast the stock’s cash flows. I find that Dassault Aviation’s ratio of 19.78x is below its peer average of 26.29x, which suggests the stock is undervalued compared to the Aerospace & Defense industry. Dassault Aviation’s share price also seems relatively stable compared to the rest of the market, as indicated by its low beta. If you believe the share price should eventually reach its true value, a low beta could suggest it is unlikely to rapidly do so anytime soon, and once it’s there, it may be hard to fall back down into an attractive buying range.

What does the future of Dassault Aviation look like?

ENXTPA:AM Future Profit May 23rd 18
ENXTPA:AM Future Profit May 23rd 18
Future outlook is an important aspect when you’re looking at buying a stock, especially if you are an investor looking for growth in your portfolio. Buying a great company with a robust outlook at a cheap price is always a good investment, so let’s also take a look at the company's future expectations. Though in the case of Dassault Aviation, it is expected to deliver a negative earnings growth of -7.49%, which doesn’t help build up its investment thesis. It appears that risk of future uncertainty is high, at least in the near term.

What this means for you:

Are you a shareholder? Although AM is currently undervalued, the negative outlook does bring on some uncertainty, which equates to higher risk. I recommend you think about whether you want to increase your portfolio exposure to AM, or whether diversifying into another stock may be a better move for your total risk and return.

Are you a potential investor? If you’ve been keeping an eye on AM for a while, but hesitant on making the leap, I recommend you research further into the stock. Given its current undervaluation, now is a great time to make a decision. But keep in mind the risks that come with negative growth prospects in the future.

Price is just the tip of the iceberg. Dig deeper into what truly matters – the fundamentals – before you make a decision on Dassault Aviation. You can find everything you need to know about Dassault Aviation in the latest infographic research report. If you are no longer interested in Dassault Aviation, you can use our free platform to see my list of over 50 other stocks with a high growth potential.

Simply Wall St analyst Simply Wall St and Simply Wall St have no position in any of the companies mentioned. This article 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.

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