Stock Analysis

Euronext Paris Stocks That May Be Undervalued In July 2024

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Amid a period of fluctuating global markets, the French stock market has shown resilience with the CAC 40 Index experiencing modest gains. This stability presents an opportune moment for investors to consider potentially undervalued stocks within Euronext Paris as they seek value in July 2024. A good stock often combines robust fundamentals with a price that does not fully reflect its future prospects, particularly in a market environment where broader economic indicators suggest potential for growth or recovery.

Top 10 Undervalued Stocks Based On Cash Flows In France

NameCurrent PriceFair Value (Est)Discount (Est)
Wavestone (ENXTPA:WAVE)€56.20€93.2139.7%
Lectra (ENXTPA:LSS)€28.50€44.0035.2%
Kalray (ENXTPA:ALKAL)€10.18€17.9943.4%
Thales (ENXTPA:HO)€153.25€266.4242.5%
Tikehau Capital (ENXTPA:TKO)€23.00€32.9430.2%
ENENSYS Technologies (ENXTPA:ALNN6)€0.628€1.0942.1%
Vivendi (ENXTPA:VIV)€11.08€16.4232.5%
Figeac Aero Société Anonyme (ENXTPA:FGA)€5.74€9.9842.5%
Groupe Airwell Société anonyme (ENXTPA:ALAIR)€3.92€6.2036.7%
Esker (ENXTPA:ALESK)€186.10€259.2828.2%

Click here to see the full list of 16 stocks from our Undervalued Euronext Paris Stocks Based On Cash Flows screener.

Let's dive into some prime choices out of from the screener.

Esker (ENXTPA:ALESK)

Overview: Esker SA is a company that operates a cloud platform for finance and customer service professionals both in France and globally, with a market capitalization of approximately €1.10 billion.

Operations: The company generates revenue primarily from its Software & Programming segment, amounting to €190.92 million.

Estimated Discount To Fair Value: 28.2%

Esker, a French software company, appears undervalued based on discounted cash flow analysis, trading at €186.1 against a fair value estimate of €259.28—a 28.2% discount. Despite recent dividend cuts, Esker's strategic enhancements in its Source-to-Pay suite signal robust future prospects by integrating sustainability and ESG compliance—factors critical in today's regulatory environment. These developments are expected to support an earnings growth forecast of 25.21% annually over the next three years, outpacing the French market prediction of 10.9%.

ENXTPA:ALESK Discounted Cash Flow as at Jul 2024

Lectra (ENXTPA:LSS)

Overview: Lectra SA specializes in industrial intelligence solutions for the fashion, automotive, and furniture industries across Northern Europe, Southern Europe, the Americas, and Asia Pacific, with a market capitalization of approximately €1.08 billion.

Operations: The company generates revenue from the Americas and Asia Pacific regions, amounting to €170.33 million and €110.28 million respectively.

Estimated Discount To Fair Value: 35.2%

Lectra appears undervalued based on discounted cash flow, with its current trading price of €28.5 well below the estimated fair value of €44, marking a significant discount. While its revenue growth at 11.3% per year is modest compared to faster-growing sectors, it outpaces the French market average. Earnings are expected to surge by 28.6% annually over the next three years, exceeding market trends significantly. However, a lower forecasted return on equity at 13.3% tempers this outlook slightly.

ENXTPA:LSS Discounted Cash Flow as at Jul 2024

Vivendi (ENXTPA:VIV)

Overview: Vivendi SE is a France-based entertainment, media, and communication company with operations across Europe, the Americas, Asia/Oceania, and Africa, boasting a market capitalization of €11.35 billion.

Operations: Vivendi's revenue is generated from several segments including Gameloft (€0.31 billion), Lagardère (€0.67 billion), Havas Group (€2.87 billion), Prisma Media (€0.31 billion), Canal + Group (€6.06 billion), and New Initiatives (€0.15 billion).

Estimated Discount To Fair Value: 32.5%

Vivendi, currently trading at €11.08, is perceived as undervalued with a fair value estimation of €16.42 based on discounted cash flow analysis. Despite recent legal settlements and plans for Canal+'s potential listing, the firm's financial outlook shows promise with expected annual earnings growth of 29.3% over the next three years—substantially outpacing the French market's forecast of 10.9%. However, its projected return on equity remains low at 6%, suggesting some caution in assessing its overall investment potential.

ENXTPA:VIV Discounted Cash Flow as at Jul 2024

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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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