July 2024 Insights Into Stocks On Euronext Paris That May Be Trading Below Estimated Value

Amidst a backdrop of fluctuating European markets, with France's CAC 40 Index recently experiencing a notable decline, investors may find potential opportunities in undervalued stocks. In such an environment, identifying stocks trading below their estimated value could be particularly compelling, as they might offer growth potential that has not yet been recognized by the broader market.

Top 10 Undervalued Stocks Based On Cash Flows In France

Name	Current Price	Fair Value (Est)	Discount (Est)
Cogelec (ENXTPA:ALLEC)	€11.20	€20.46	45.2%
NSE (ENXTPA:ALNSE)	€26.30	€50.98	48.4%
Wavestone (ENXTPA:WAVE)	€57.30	€93.33	38.6%
Thales (ENXTPA:HO)	€154.45	€267.69	42.3%
Lectra (ENXTPA:LSS)	€28.90	€44.70	35.3%
Tikehau Capital (ENXTPA:TKO)	€24.10	€32.70	26.3%
ENENSYS Technologies (ENXTPA:ALNN6)	€0.67	€1.11	39.6%
Vivendi (ENXTPA:VIV)	€10.795	€16.33	33.9%
Figeac Aero Société Anonyme (ENXTPA:FGA)	€5.86	€10.12	42.1%
OVH Groupe (ENXTPA:OVH)	€5.805	€7.63	23.9%

Click here to see the full list of 15 stocks from our Undervalued Euronext Paris Stocks Based On Cash Flows screener.

Let's review some notable picks from our screened stocks.

Edenred (ENXTPA:EDEN)

Overview: Edenred SE operates a global digital platform offering services and payments solutions for companies, employees, and merchants, with a market capitalization of approximately €10.44 billion.

Operations: The company generates €2.31 billion in revenue from its Business Services segment.

Estimated Discount To Fair Value: 12.3%

Edenred, priced at €41.95, trades below its estimated fair value of €47.84, suggesting a moderate undervaluation based on discounted cash flows. Despite this, the company shows robust prospects with an expected earnings growth of 20.15% per year and revenue growth forecasts aligning at 10.9% annually—outpacing the French market's 5.6%. However, challenges include a high level of debt and profit margins that have declined from last year's 19.9% to 11.6%. Analysts predict a potential price increase of up to 46.8%.

• Insights from our recent growth report point to a promising forecast for Edenred's business outlook.
• Unlock comprehensive insights into our analysis of Edenred stock in this financial health report.

Thales (ENXTPA:HO)

Overview: Thales S.A. operates globally, offering a range of solutions across defence, aerospace, digital identity and security, and transportation sectors with a market capitalization of approximately €31.92 billion.

Operations: Thales generates revenue through several segments: €10.18 billion from Defence & Security (excluding Digital I&S), €5.34 billion from Aerospace, and €3.42 billion from Digital Identity & Security.

Estimated Discount To Fair Value: 42.3%

Thales, valued at €154.45, is perceived as undervalued against a fair value estimation of €267.69, reflecting a significant discount based on cash flows. Recent strategic alliances and product launches underline its active expansion in cybersecurity and aerospace sectors, potentially enhancing future revenue streams which are expected to grow by 6.3% annually—surpassing the French market's 5.6% growth rate. However, its financial stance is strained by high debt levels and one-off items affecting earnings quality, with a forecasted robust return on equity of 24.1% in three years.

• Our earnings growth report unveils the potential for significant increases in Thales' future results.
• Click here and access our complete balance sheet health report to understand the dynamics of Thales.

Tikehau Capital (ENXTPA:TKO)

Overview: Tikehau Capital is a private equity and venture capital firm that offers a variety of financing products such as senior secured loans, equity, senior debt, unitranche, mezzanine, and preferred shares, with a market capitalization of approximately €4.17 billion.

Operations: The firm generates revenue through two primary segments: Investment Activities, which brought in €179.19 million, and Asset Management Activities, contributing €322.32 million.

Estimated Discount To Fair Value: 26.3%

Tikehau Capital, priced at €24.1, trades 26.3% below its fair value of €32.7, suggesting undervaluation based on cash flow analysis. Despite a dividend increase to €0.75 per share in 2024, its dividend coverage by free cash flows remains weak. The firm's earnings are expected to grow by 31.26% annually, outpacing the French market's forecast of 10.9%. However, it faces challenges with a low forecast return on equity of 12.6% and declining profit margins from 53.2% to 35.2%.

• Our expertly prepared growth report on Tikehau Capital implies its future financial outlook may be stronger than recent results.
• Click to explore a detailed breakdown of our findings in Tikehau Capital's balance sheet health report.

Taking Advantage

• Explore the 15 names from our Undervalued Euronext Paris Stocks Based On Cash Flows screener here.
• Are you invested in these stocks already? Keep abreast of every twist and turn by setting up a portfolio with Simply Wall St, where we make it simple for investors like you to stay informed and proactive.
• Maximize your investment potential with Simply Wall St, the comprehensive app that offers global market insights for free.

Interested In Other Possibilities?

• Explore high-performing small cap companies that haven't yet garnered significant analyst attention.
• Diversify your portfolio with solid dividend payers offering reliable income streams to weather potential market turbulence.
• Fuel your portfolio with companies showing strong growth potential, backed by optimistic outlooks both from analysts and management.

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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