Is Accor SA (EPA:AC) Potentially Undervalued?

By
Simply Wall St
Published
September 18, 2021
ENXTPA:AC
Source: Shutterstock

While Accor SA (EPA:AC) might not be the most widely known stock at the moment, it saw significant share price movement during recent months on the ENXTPA, rising to highs of €35.31 and falling to the lows of €28.01. Some share price movements can give investors a better opportunity to enter into the stock, and potentially buy at a lower price. A question to answer is whether Accor's current trading price of €28.51 reflective of the actual value of the mid-cap? Or is it currently undervalued, providing us with the opportunity to buy? Let’s take a look at Accor’s outlook and value based on the most recent financial data to see if there are any catalysts for a price change.

Check out our latest analysis for Accor

What is Accor worth?

Good news, investors! Accor is still a bargain right now. According to my valuation, the intrinsic value for the stock is €42.98, but it is currently trading at €28.51 on the share market, meaning that there is still an opportunity to buy now. Although, there may be another chance to buy again in the future. This is because Accor’s beta (a measure of share price volatility) is high, meaning its price movements will be exaggerated relative to the rest of the market. If the market is bearish, the company's shares will likely fall by more than the rest of the market, providing a prime buying opportunity.

What kind of growth will Accor generate?

earnings-and-revenue-growth
ENXTPA:AC Earnings and Revenue Growth September 18th 2021

Investors looking for growth in their portfolio may want to consider the prospects of a company before buying its shares. Although value investors would argue that it’s the intrinsic value relative to the price that matter the most, a more compelling investment thesis would be high growth potential at a cheap price. With profit expected to grow by 69% over the next year, the near-term future seems bright for Accor. It looks like higher cash flow is on the cards for the stock, which should feed into a higher share valuation.

What this means for you:

Are you a shareholder? Since AC is currently undervalued, it may be a great time to increase your holdings in the stock. With a positive outlook on the horizon, it seems like this growth has not yet been fully factored into the share price. However, there are also other factors such as capital structure to consider, which could explain the current undervaluation.

Are you a potential investor? If you’ve been keeping an eye on AC for a while, now might be the time to make a leap. Its prosperous future outlook isn’t fully reflected in the current share price yet, which means it’s not too late to buy AC. But before you make any investment decisions, consider other factors such as the strength of its balance sheet, in order to make a well-informed buy.

It can be quite valuable to consider what analysts expect for Accor from their most recent forecasts. So feel free to check out our free graph representing analyst forecasts.

If you are no longer interested in Accor, you can use our free platform to see our list of over 50 other stocks with a high growth potential.

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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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