Bouygues (ENXTPA:EN) has been catching investors’ attention lately, not because of a single major announcement but due to some mixed share price action that is turning heads. The recent movement might seem uneventful on the surface; however, when a stock with Bouygues’ long-term track record begins to shift gears, market-watchers can’t help but ask whether it is a signal for something bigger. There is a competing narrative here, with some investors eyeing the company’s fundamentals and wondering if the current price tells the whole story.
Digging into the numbers, Bouygues is up 26% since the start of the year and has delivered a 19% total return over the past twelve months, despite some cooling momentum in recent months. The past month and past three months have both seen mild declines, though these look more like a breather after the strong year-to-date run. These moves arrive as Bouygues posts steady revenue growth and even stronger profit gains, pointing to some underlying resilience even as near-term sentiment pivots back and forth.
So is this recent dip a reason to get off the sidelines, or is the market already anticipating Bouygues’ next chapter? Let’s dive into the numbers and see what the current valuation suggests.
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Most Popular Narrative: 11.8% Undervalued
According to the most widely circulated narrative, Bouygues is considered undervalued by nearly 12% relative to its calculated fair value. This view hinges on expectations for sustained earnings growth, improving margins, and robust order intake across key infrastructure and green initiatives.
“Bouygues' €33 billion construction backlog, buoyed by strong international order intake (notably outside France for Colas in EMEA, Asia-Pacific, and North America), provides solid multi-year revenue visibility. This positions the company to benefit from ongoing infrastructure demand in urbanizing markets and government green investment, supporting future revenue and EBITDA growth.”
Want to know what is driving up Bouygues’ fair value? Here’s a hint: analysts are betting on an earnings surge and profit margin boost, with forecasts suggesting a dramatic step-change from recent performance. What is behind the optimistic price target? Delve deeper to uncover the crucial numbers and surprising assumptions that underpin this valuation story.
However, competitive pricing in telecom and slowdowns in key projects could challenge Bouygues' growth outlook. This raises questions about the sustainability of recent optimism.
Looking from a different angle, our DCF model suggests Bouygues might be even more undervalued than the first estimate. This approach weighs future cash flows rather than recent market multiples. Could the true value be higher than most expect?
If you prefer to dig into the details yourself and shape your own conclusions, you can craft your own story about Bouygues in just a few minutes: Do it your way.
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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.
Valuation is complex, but we're here to simplify it.
Discover if Bouygues might be undervalued or overvalued with our detailed analysis, featuring fair value estimates, potential risks, dividends, insider trades, and its financial condition.
Kshitija (or Keisha) Bhandaru is an Equity Analyst at Simply Wall St and has over 6 years of experience in the finance industry and describes herself as a lifelong learner driven by her intellectual curiosity. She previously worked with Market Realist for 5 years as an Equity Analyst.
