Why JCDecaux SA (EPA:DEC) Could Be Worth Watching

JCDecaux SA (EPA:DEC), might not be a large cap stock, but it received a lot of attention from a substantial price movement on the ENXTPA over the last few months, increasing to €18.39 at one point, and dropping to the lows of €13.32. 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 JCDecaux's current trading price of €13.62 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 JCDecaux’s outlook and value based on the most recent financial data to see if there are any catalysts for a price change.

View our latest analysis for JCDecaux

What Is JCDecaux Worth?

According to my valuation model, JCDecaux seems to be fairly priced at around 16% below my intrinsic value, which means if you buy JCDecaux today, you’d be paying a reasonable price for it. And if you believe that the stock is really worth €16.28, then there’s not much of an upside to gain from mispricing. Is there another opportunity to buy low in the future? Since JCDecaux’s share price is quite volatile, we could potentially see it sink lower (or rise higher) in the future, giving us another chance to buy. This is based on its high beta, which is a good indicator for how much the stock moves relative to the rest of the market.

What does the future of JCDecaux look like?

Future outlook is an important aspect when you’re looking at buying a stock, especially if you are an investor looking for growth in your portfolio. Buying a great company with a robust outlook at a cheap price is always a good investment, so let’s also take a look at the company's future expectations. JCDecaux's earnings over the next few years are expected to increase by 51%, indicating a highly optimistic future ahead. This should lead to more robust cash flows, feeding into a higher share value.

What This Means For You

Are you a shareholder? DEC’s optimistic future growth appears to have been factored into the current share price, with shares trading around its fair value. However, there are also other important factors which we haven’t considered today, such as the track record of its management team. Have these factors changed since the last time you looked at the stock? Will you have enough confidence to invest in the company should the price drop below its fair value?

Are you a potential investor? If you’ve been keeping an eye on DEC, now may not be the most advantageous time to buy, given it is trading around its fair value. However, the positive outlook is encouraging for the company, which means it’s worth diving deeper into other factors such as the strength of its balance sheet, in order to take advantage of the next price drop.

If you want to dive deeper into JCDecaux, you'd also look into what risks it is currently facing. In terms of investment risks, we've identified 1 warning sign with JCDecaux, and understanding it should be part of your investment process.

If you are no longer interested in JCDecaux, 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.