What Can We Expect for Maisons France Confort SA (EPA:MFC) Moving Forward?

Maisons France Confort SA (EPA:MFC), a €316.34m small-cap, operates in the retail industry impacted by the digital transformation for all retail channels, and the challenging economic environment. In particular, physical store retailers faced the inevitable challenge of building up an online presence in order to enhance their omnichannel capabilities. Most of the growth have been a result of the investment in streamlining distribution infrastructure and improving website platforms to accommodate the shift in spending. Retail analysts are forecasting for the entire industry, a positive double-digit growth of 28.22% in the upcoming year , and a massive growth of 34.27% over the next couple of years. However this rate still came in below the growth rate of the FR stock market as a whole. An interesting question to explore is whether we can we benefit from entering into the retail sector right now. Today, I will analyse the industry outlook, and also determine whether Maisons France Confort is a laggard or leader relative to its retail sector peers.

See our latest analysis for Maisons France Confort

What’s the catalyst for Maisons France Confort's sector growth?

E-retailing is expected to remain the fastest growing sales channel, shifting the retail landscape. Significant number of retail store closures and bankruptcies were an indication of both changing consumer preferences and rising online competition. Over the past year, the industry saw growth in the thirties, beating the FR market growth of 11.98%. Maisons France Confort leads the pack with its impressive earnings growth of 89.17% over the past year. However, analysts are not expecting this industry-beating trend to continue, with future growth expected to be 7.86% compared to the wider retail sector growth hovering in the twenties next year. This growth is a median of profitable companies of 5 Consumer Durables companies in FR including Kaufman & Broad, SEB and AST Groupe. As a future industry laggard in growth, Maisons France Confort may be a cheaper stock relative to its peers.

Is Maisons France Confort and the sector relatively cheap?

The retail sector's PE is currently hovering around 17.83x, relatively similar to the rest of the FR stock market PE of 17.72x. This means the industry, on average, is fairly valued compared to the wider market – minimal expected gains and losses from mispricing here. However, the industry returned a higher 14.96% compared to the market’s 10.96%, potentially illustrative of past tailwinds. On the stock-level, Maisons France Confort is trading at a lower PE ratio of 11.26x, making it cheaper than the average retail stock. In terms of returns, Maisons France Confort generated 17.06% in the past year, which is 2.10% over the retail sector.

Next Steps:

Maisons France Confort is a retail industry laggard in terms of its future growth outlook. This is possibly reflected in the PE ratio, with the stock trading below its peers. If the stock has been on your watchlist for a while, now may be the time to dig deeper. Although the market is expecting lower growth for the company relative to its peers, Maisons France Confort is also trading at a discount, meaning that there could be some value from a potential mispricing. However, before you make a decision on the stock, I suggest you look at Maisons France Confort's fundamentals in order to build a holistic investment thesis.

1. Financial Health: Does it have a healthy balance sheet? Take a look at our free balance sheet analysis with six simple checks on key factors like leverage and risk.
2. Historical Track Record: What has MFC's performance been like over the past? Go into more detail in the past track record analysis and take a look at the free visual representations of our analysis for more clarity.
3. Other High-Growth Alternatives : Are there other high-growth stocks you could be holding instead of Maisons France Confort? Explore our interactive list of stocks with large growth potential to get an idea of what else is out there you may be missing!

To help readers see past the short term volatility of the financial market, we aim to bring you a long-term focused research analysis purely driven by fundamental data. Note that our analysis does not factor in the latest price-sensitive company announcements.

The author is an independent contributor and at the time of publication had no position in the stocks mentioned. For errors that warrant correction please contact the editor at editorial-team@simplywallst.com.

Simply Wall St analyst Simply Wall St and Simply Wall St have no position in any of the companies mentioned. This article 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.