What Do Imerys’s New Sustainability Plans and Falling Share Price Mean for Investors in 2025?

• Curious if Imerys is a hidden gem or a potential value trap? You are not alone. Many investors are looking for a clear answer on whether this stock is undervalued right now.
• After a choppy year, Imerys shares have dropped 30.2% over the last 12 months and are down 23.3% year-to-date. This past week, the stock saw a modest 1.1% rise.
• There has been increased attention on Imerys as the company recently announced new sustainability initiatives and a strategic review of some business segments. These developments may be reshaping investor expectations and could be influencing the recent price swings.
• Currently, Imerys scores 5 out of 6 checks for being undervalued on our valuation scorecard, which is a strong showing. We will break down how analysts, models, and simple ratios assess Imerys's value and share an even more insightful approach to valuation later in the article.

Find out why Imerys's -30.2% return over the last year is lagging behind its peers.

Approach 1: Imerys Discounted Cash Flow (DCF) Analysis

The Discounted Cash Flow (DCF) model estimates a company's intrinsic value by projecting its future free cash flows and discounting them back to their present value. For Imerys, this approach starts with last year's Free Cash Flow of €79.0 million and considers annual growth, as guided by analysts and further extrapolated estimates.

According to the model, analysts project Imerys's Free Cash Flow to rise steadily over the coming years, reaching €123.7 million in 2027. Looking ahead 10 years, estimates continue to trend upward and move into the €300 million range by 2035. All cash flows are calculated in euros, which is Imerys's reporting currency.

Based on these cash flow projections, Imerys's estimated intrinsic value per share is €33.13. With the current share price trading at a 35.3% discount to this valuation, the stock appears significantly undervalued relative to its fundamental cash flow prospects.

Result: UNDERVALUED

Our Discounted Cash Flow (DCF) analysis suggests Imerys is undervalued by 35.3%. Track this in your watchlist or portfolio, or discover 842 more undervalued stocks based on cash flows.

Head to the Valuation section of our Company Report for more details on how we arrive at this Fair Value for Imerys.

Approach 2: Imerys Price vs Earnings

The Price-to-Earnings (PE) ratio is a commonly used valuation metric for profitable companies like Imerys because it relates a company’s market price directly to its earnings. A lower PE suggests a stock might be undervalued relative to its profits, while a higher PE might indicate an expensive stock. However, "normal" or "fair" PE ratios can vary widely. They are shaped by how fast investors expect a company to grow, as well as the risks and stability of its business.

Imerys currently trades at a PE ratio of 11.44x. For context, the Basic Materials industry average stands at 14.97x, while the average among directly comparable peers is even higher at 15.56x. In other words, Imerys trades at a notable discount to both its sector and peers.

The Simply Wall St "Fair Ratio" refines this comparison. It is a proprietary metric that factors in more than just broad industry averages. It adjusts for Imerys’s unique prospects, growth rates, profit margins, size, and risk. Rather than treating every company in the sector as equal, the Fair Ratio tailors expectations specifically for Imerys. For Imerys, the Fair Ratio is 18.07x, comfortably above its current PE. This means Simply Wall St's framework sees Imerys as undervalued on an earnings basis, even after accounting for its particular risks and outlook.

Result: UNDERVALUED

PE ratios tell one story, but what if the real opportunity lies elsewhere? Discover 1405 companies where insiders are betting big on explosive growth.

Upgrade Your Decision Making: Choose your Imerys Narrative

Earlier we mentioned that there is an even better way to understand valuation. Let’s introduce you to Narratives, a user-friendly method that puts your personal story and expectations front and center when analyzing a company’s value.

A Narrative is simply the story you believe about a business, reflected in the numbers you assign to its future revenue, earnings, margins, and ultimately its fair value. By linking your view of Imerys’s prospects directly to a projected financial forecast and updated fair value, Narratives let you make investment decisions with more confidence and clarity.

On Simply Wall St, Narratives are available through the Community page and trusted by millions of investors. They help you easily see if now is the right time to buy or sell by comparing your Fair Value to the current Price.

Your Narrative updates dynamically whenever news or results arrive, so your insights stay relevant in real time.

For example, some investors may build a more optimistic Imerys Narrative that values the stock as high as €38.0 per share, while a more cautious view may see fair value closer to €22.0. This lets you see precisely where you stand and what might change your outlook.

Do you think there's more to the story for Imerys? Head over to our Community to see what others are saying!

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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