Thales (ENXTPA:HO) Valuation in Focus After 24% Share Price Surge

Thales (ENXTPA:HO) shares have quietly tracked higher over the past month, gaining nearly 24%. Investors may be watching to see if this momentum signals a shift in how the market views the company’s current valuation.

See our latest analysis for Thales.

Thales has notched a notable upswing recently, riding a wave of optimism that builds on its solid showing over the past year. The company’s 1-year total shareholder return of 89% stands out, suggesting renewed confidence and perhaps hints of growth potential ahead.

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With shares racing higher and investor sentiment riding high, the key question now is whether Thales remains undervalued or if the recent rally means that future growth is already fully factored into the price.

Most Popular Narrative: 9% Undervalued

Compared to Thales’ last close at €273, the most widely followed narrative signals a fair value closer to €300. This creates a compelling contrast between current price levels and what analysts suggest is possible, setting the stage for a deeper look at the underlying assumptions.

“Acceleration of defense spending in France and across Europe (e.g., France raising its defense budget from €50 billion in 2025 to €64 billion by 2027, earlier than previously planned) is set to significantly boost order intake and revenue for Thales’ defense segment, supporting multi-year revenue growth visibility.”

Read the complete narrative.

Want to know exactly how this bullish momentum shapes the numbers? The most closely watched projections combine growth, margins, and aggressive sector trends. Find out which surprising assumptions drive the narrative’s fair value.

Result: Fair Value of €300 (UNDERVALUED)

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

However, execution risks in Thales’ digital transformation, as well as its reliance on government defense budgets, could challenge the sustainability of current growth expectations.

Find out about the key risks to this Thales narrative.

Another View: Market Multiples Tell a Different Story

While some see Thales as undervalued, the market’s own earnings-based comparison adds caution. The company trades at a high 53.6 times earnings, which is well above both its industry’s 34 times and its peer group’s 31.4 times. The fair ratio sits at 33.8 times, indicating the market expects a lot from Thales right now. Do these lofty expectations leave room for upside, or could they set up a reality check?

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

Build Your Own Thales Narrative

If you see the numbers differently or want to dig deeper into Thales’ story, you can craft your own perspective in just a few minutes. Do it your way.

A great starting point for your Thales research is our analysis highlighting 3 key rewards and 1 important warning sign 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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