Vinci (ENXTPA:DG) Valuation: Is There Still Upside After a Strong Year for Shareholders?

Vinci (ENXTPA:DG) shares have been relatively steady this week, trading at €116.70 at the last close. Over the past month, the stock has slipped by 4%, while still delivering a 21% total return for shareholders over the past year.

See our latest analysis for Vinci.

While Vinci’s share price has cooled off recently, giving back nearly 4% over the past month, longer-term momentum tells a different story. Shareholders have seen a solid 21% total return over the past year. This suggests that while short-term sentiment has softened, Vinci's overall performance remains robust against a backdrop of steady fundamentals and past growth.

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But with Vinci’s shares delivering solid long-term returns, is there real value on the table for new buyers, or has the market already accounted for the company’s future growth prospects?

Most Popular Narrative: 15.6% Undervalued

The most widely followed view on Vinci sets its fair value at €138.24, comfortably above the most recent closing price of €116.70. This points to a story of upside potential, based on a mix of infrastructure momentum, high-margin expansion, and bold assumptions about future growth.

Expansion of high-margin, recurring cash flow businesses in Concessions (motorways, airports), with further upside from capacity expansions (for example, new Lisbon and London Gatwick runways, continuing airport upgrades), should enhance group operating margins and earnings, especially as traffic volumes and user demand for mobility rise.

Read the complete narrative.

Curious what powers that price tag? The narrative highlights a combination of improved margins, larger cash flows, and resilience comparable to blue-chip titans. Explore the ambitious forecast numbers and see for yourself why some think Vinci’s valuation could set a new benchmark.

Result: Fair Value of €138.24 (UNDERVALUED)

Have a read of the narrative in full and understand what's behind the forecasts.

However, major risks such as uncertainty around French motorway contracts and rising tax burdens could challenge Vinci’s earnings outlook and test this bullish view.

Find out about the key risks to this Vinci narrative.

Another View: Multiples Put Valuation in Context

Looking from a current earnings perspective, Vinci trades at a price-to-earnings ratio of 13.2x, below both the European Construction industry average of 14.2x and peers at 21.8x. This suggests Vinci shares could be good value compared to its rivals. The fair ratio is estimated at an even higher 23.2x, which could imply further upside if market sentiment shifts. Does this difference present a unique buying window, or does it signal caution for today's investors?

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

Simply Wall St performs a discounted cash flow (DCF) on every stock in the world every day (check out Vinci 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 895 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 Vinci Narrative

If you think the story is missing a key angle or want to test your own assumptions, you can build a narrative around Vinci in just minutes with Do it your way.

A great starting point for your Vinci research is our analysis highlighting 4 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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