Assessing Nexans (ENXTPA:NEX) Valuation After Recent Share Price Gains

Nexans (ENXTPA:NEX) has been on investor radars lately, with stock performance showing mixed signals over the past few months. Looking at recent returns, shares have gained 6% in the last day and 2% this week.

See our latest analysis for Nexans.

Nexans has shown notable momentum this year, with a 20.9% share price return year to date and a 17.7% total shareholder return over the last twelve months. Recent positive moves suggest investors are responding to shifting sentiment about the company’s long-term prospects, despite share price volatility earlier in the year.

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With recent momentum driving Nexans shares higher, investors are left wondering whether this is a case of undervaluation with more upside ahead or if the market has already priced in the company’s future growth potential.

Most Popular Narrative: 5.7% Undervalued

Nexans’ most popular narrative sets its fair value at €133.79, slightly above the last close price of €126.10. The market looks nearly in line, but a modest upside remains if the analysts’ view plays out.

The ongoing acceleration of global electrification, renewable energy adoption, grid modernization, and significant investments in infrastructure (especially in Europe and emerging markets) continue to drive strong organic growth in Nexans' Electrification, Power Grid, and Transmission segments. This supports a robust order backlog and increased revenue visibility for coming years. Nexans' strategic transformation into a near pure-play electrification company, combined with sustained focus on high-value-grid, offshore wind, and specialty cabling solutions, positions the company to benefit from expanding high-margin market opportunities and structurally improve group net margins.

Read the complete narrative.

Curious how this scenario comes together? The real twist is that the narrative hinges on bold margin expansion and a shift in profit multiples. The consensus unpacks surprising growth and valuation assumptions you won’t want to miss. Discover what drives the fair value just above today’s price.

Result: Fair Value of €133.79 (UNDERVALUED)

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

However, unforeseen challenges such as escalating competition or volatile raw material costs may still threaten Nexans’ earnings outlook and put pressure on future profitability.

Find out about the key risks to this Nexans narrative.

Another View: Our DCF Model Raises Questions

While analysts see slight upside for Nexans based on market consensus, our SWS DCF model paints a different picture. It estimates fair value at €83.67, which suggests the shares are actually trading well above their underlying cash flows. Could short-term optimism be clouding deeper valuation risks?

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 Nexans 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 897 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 Nexans Narrative

If you have a different take or want to dive into the numbers yourself, you can craft your own view in just a few minutes: Do it your way.

A great starting point for your Nexans research is our analysis highlighting 3 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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