A Closer Look at Safran (ENXTPA:SAF): Is the Current Valuation Justified?

Safran (ENXTPA:SAF) shares have been on the rise lately, catching the attention of investors who are keeping an eye on its steady gains over the past month and year. This upward trend invites a closer look at what is driving recent performance.

See our latest analysis for Safran.

Momentum clearly continues to build for Safran, with a 43.2% year-to-date share price return and an impressive 48.1% total shareholder return over the last twelve months. This comes in addition to a remarkable 185.9% total return for shareholders over the past three years, highlighting renewed optimism about the company’s growth prospects and market positioning.

If the recent surge in Safran’s share price has you rethinking your portfolio, this could be the perfect moment to discover See the full list for free.

But with shares hovering near analyst targets, the big question becomes whether Safran is still undervalued or if the market is already factoring in all of its future growth. Is this a genuine buying opportunity, or is it too late?

Most Popular Narrative: 3.9% Undervalued

Safran's narrative fair value outpaces the last close, suggesting the stock could have more room to run if projections materialize. The latest price sits just below the consensus target, creating a narrow but intriguing gap for investors.

The recent acquisition of Collins' actuation and flight control assets, along with other targeted acquisitions and strategic partnerships, will broaden Safran's mission-critical offering, drive cost synergies through 2028, and further diversify revenue streams, likely resulting in higher EBIT margins and more stable earnings.

Read the complete narrative.

Want to know what is fueling this premium price tag? The key to the story lies in robust growth targets and a bold margin outlook. The market’s valuation hinges on forecasts that defy industry norms. See what’s pushing this stock beyond the ordinary.

Result: Fair Value of €320.35 (UNDERVALUED)

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

However, supply chain bottlenecks or underwhelming execution on recent acquisitions could quickly shift expectations and limit Safran’s ambitious growth narrative.

Find out about the key risks to this Safran narrative.

Another View: SWS DCF Model Adds a Cautious Note

Looking from another angle, our SWS discounted cash flow (DCF) model suggests Safran may be expensive at current prices, with shares trading above the calculated fair value. This presents a different scenario: are upbeat market expectations running ahead of more grounded long-term projections?

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 Safran 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 Safran Narrative

If you see the story differently or want to dive into the numbers yourself, you can build your own perspective and narrative quickly. Do it your way

A good starting point is our analysis highlighting 3 key rewards investors are optimistic about regarding Safran.

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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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