Eiffage (ENXTPA:FGR): Assessing Valuation After Major Energy Transition Contract Win in Toulouse Region

If you have been watching Eiffage (ENXTPA:FGR) lately, the latest client win might give you something new to think about. The company, alongside NGE, just secured a major contract with SUEZ to handle the civil engineering for two waste-to-energy plants in the Toulouse and northern Haute-Garonne region. With one plant set for modernisation and another entirely new facility, this agreement underlines Eiffage’s growing clout in energy transition infrastructure, an area that is front and center for both investors and policymakers looking at the sustainability megatrend.

This announcement comes as Eiffage’s share price has shown clear momentum over the past year, rising 22% and easily outpacing the broader market. The company made steady progress over the past three years, and after a challenging past month, long-term holders have still enjoyed returns exceeding 86% over five years. Notably, annual net income growth of 11% helps lend credibility to the idea that Eiffage’s strategy is delivering, not just in contracts, but in the numbers as well.

With shares climbing over the past year and a fresh contract to bolster Eiffage’s order book, the key question now is: does the current price reflect all this future growth, or is there still value for investors willing to look ahead?

Most Popular Narrative: 22.8% Undervalued

The prevailing narrative sees Eiffage as meaningfully undervalued, with analysts projecting robust opportunities in renewable energy and European infrastructure as central to the company’s long-term investment case.

The robust pipeline of renewable energy and offshore wind projects, plus recent acquisitions like HSM Offshore Energy, position Eiffage to capture rising demand for climate-resilient infrastructure and cleaner energy solutions across Europe. This supports long-term revenue growth and increasingly stable, diversified cash flows.

Want to know why analysts are pricing Eiffage well above its current level? There is a growth formula behind the scenes, built on accelerating earnings, rising margins, and a future profit multiple that rivals top peers. Curious which bold assumptions are driving such a bullish fair value? Discover the underlying projections and see what is fueling the optimism around Eiffage’s future profits.

Result: Fair Value of €142.12 (UNDERVALUED)

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

However, sustained weakness in French real estate or rising corporate taxes could threaten Eiffage’s growth outlook and call today's valuation into question.

Find out about the key risks to this Eiffage narrative.

Another View: Discounted Cash Flow Perspective

Looking from another angle, our DCF model suggests Eiffage could be even more undervalued than analysts predict, relying purely on future cash flows. However, do these models capture the full real-world picture?

Look into how the SWS DCF model arrives at its fair value.

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

If the numbers or narrative do not quite match your perspective, you can quickly dig deeper and shape your own story in minutes. Do it your way.

A great starting point for your Eiffage 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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