Today we're going to take a look at the well-established Bouygues SA (EPA:EN). The company's stock saw a decent share price growth of 10% on the ENXTPA over the last few months. The recent share price gains has brought the company back closer to its yearly peak. 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 we will analyse the most recent data on Bouygues’s outlook and valuation to see if the opportunity still exists.
What Is Bouygues Worth?
According to our price multiple model, which makes a comparison between the company's price-to-earnings ratio and the industry average, the stock price seems to be justfied. We’ve used the price-to-earnings ratio in this instance because there’s not enough visibility to forecast its cash flows. The stock’s ratio of 13.71x is currently trading slightly below its industry peers’ ratio of 14.73x, which means if you buy Bouygues today, you’d be paying a decent price for it. And if you believe Bouygues should be trading in this range, then there isn’t much room for the share price to grow beyond the levels of other industry peers over the long-term. Furthermore, Bouygues’s share price also seems relatively stable compared to the rest of the market, as indicated by its low beta. This may mean it is less likely for the stock to fall lower from natural market volatility, which suggests less opportunities to buy moving forward.
View our latest analysis for Bouygues
What does the future of Bouygues look like?
Investors looking for growth in their portfolio may want to consider the prospects of a company before buying its shares. Although value investors would argue that it’s the intrinsic value relative to the price that matter the most, a more compelling investment thesis would be high growth potential at a cheap price. With profit expected to grow by 37% over the next couple of years, the future seems bright for Bouygues. It looks like higher cash flow is on the cards for the stock, which should feed into a higher share valuation.

What This Means For You
Are you a shareholder? EN’s optimistic future growth appears to have been factored into the current share price, with shares trading around industry price multiples. However, there are also other important factors which we haven’t considered today, such as the financial strength of the company. Have these factors changed since the last time you looked at EN? Will you have enough confidence to invest in the company should the price drop below the industry PE ratio?
Are you a potential investor? If you’ve been keeping an eye on EN, now may not be the most advantageous time to buy, given it is trading around industry price multiples. However, the positive outlook is encouraging for EN, which means it’s worth further examining other factors such as the strength of its balance sheet, in order to take advantage of the next price drop.
So if you'd like to dive deeper into this stock, it's crucial to consider any risks it's facing. In terms of investment risks, we've identified 1 warning sign with Bouygues, and understanding this should be part of your investment process.
If you are no longer interested in Bouygues, you can use our free platform to see our list of over 50 other stocks with a high growth potential.
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.
Access Free AnalysisHave feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.
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.
About ENXTPA:EN
Bouygues
Operates in the construction, energy, telecom, media, and transport infrastructure sectors in France and internationally.
Undervalued established dividend payer.
Similar Companies
Market Insights
Community Narratives

