Safran (ENXTPA:SAF): Is There More Upside After a 39% Year-to-Date Rally?

Safran (ENXTPA:SAF) shares recently saw a modest move higher. This has drawn interest as investors gauge the company’s performance over the past month and consider what is driving these gains in the absence of a specific news catalyst.

See our latest analysis for Safran.

Safran’s share price has enjoyed a sustained run, with a 4.9% gain over the past month adding to its already strong year-to-date price return of 39%. Long-term investors have done even better, as the total shareholder return over the past year has hit 45%, pointing to growing optimism about the company’s growth and valuation prospects.

If aerospace momentum like this has you thinking bigger, it could be a perfect moment to see which peers are gaining altitude in our See the full list for free.

With shares near record highs and analyst targets only slightly above the current price, the key question is whether Safran’s impressive run leaves room for further gains or if the market has already priced in its future growth prospects.

Most Popular Narrative: 3.8% Undervalued

Safran’s most-followed narrative estimates a fair value of €311.43, just ahead of the last close at €299.5. The difference is small, but the story behind those numbers is complex.

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 and drive cost synergies through 2028. These moves are also expected to further diversify revenue streams, which could result in higher EBIT margins and more stable earnings.

Read the complete narrative.

Ever wondered how much Safran’s valuation depends on ambitious revenue growth, shrinking profit margins, and market-beating future earnings estimates? Discover the full financial assumptions that make this price target stand out and see what drives the consensus behind Safran’s fair value story.

Result: Fair Value of €311.43 (UNDERVALUED)

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

However, persistent supply chain issues and reliance on large customers could quickly dampen Safran’s outlook if market conditions shift or if disruptions return.

Find out about the key risks to this Safran narrative.

Another View: DCF Model Challenges the Narrative

While analyst targets suggest Safran is slightly undervalued, our SWS DCF model presents a different perspective. It calculates a fair value of €206.16, which is well below today’s price and suggests investors may be getting ahead of themselves. Which method better captures Safran’s true risk and reward?

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 have a different perspective or want to investigate the numbers yourself, you can develop your own narrative in just a few minutes, starting here: 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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