Discover 3 European Stocks Estimated To Be Up To 38.3% Below Intrinsic Value

Amid renewed uncertainty surrounding U.S. trade policy and escalating geopolitical tensions in the Middle East, European markets have faced a challenging environment, with the pan-European STOXX Europe 600 Index ending 1.57% lower recently. Despite these headwinds, opportunities may arise for investors seeking undervalued stocks that are trading below their intrinsic value, as market fluctuations can sometimes obscure the true potential of certain companies.

Top 10 Undervalued Stocks Based On Cash Flows In Europe

Click here to see the full list of 178 stocks from our Undervalued European Stocks Based On Cash Flows screener.

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

SNGN Romgaz (BVB:SNG)

Overview: SNGN Romgaz SA is a Romanian company engaged in the exploration, production, and supply of natural gas with a market capitalization of RON26.71 billion.

Operations: The company's revenue is primarily derived from its upstream operations, which contribute RON7.54 billion, followed by storage and electricity segments generating RON586.95 million and RON557.14 million respectively.

Estimated Discount To Fair Value: 38.3%

SNGN Romgaz appears undervalued, trading at RON6.93, significantly below its estimated fair value of RON11.24. Despite a decline in net income to RON 950.98 million for Q1 2025, the company maintains strong cash flow potential with earnings forecasted to grow annually by 11.6%, outpacing the Romanian market average of 3.1%. With a high return on equity projected at 20.5% in three years and good relative value compared to peers, it presents an attractive investment opportunity based on discounted cash flows (DCF).

• In light of our recent growth report, it seems possible that SNGN Romgaz's financial performance will exceed current levels.
• Click here to discover the nuances of SNGN Romgaz with our detailed financial health report.

Hensoldt (XTRA:HAG)

Overview: Hensoldt AG, along with its subsidiaries, offers sensor solutions for defense and security applications globally and has a market cap of €10.62 billion.

Operations: The company's revenue is derived from its Sensors segment, which accounts for €1.96 billion, and its Optronics segment, contributing €363 million.

Estimated Discount To Fair Value: 22.5%

Hensoldt is trading at €91.95, undervalued compared to its estimated fair value of €118.68, offering potential upside based on discounted cash flows (DCF). Despite a Q1 net loss of €30 million, earnings are expected to grow significantly by 29.2% annually over the next three years, surpassing the German market's average growth rate. However, interest payments are not well covered by earnings and share price volatility remains high in recent months.

• Upon reviewing our latest growth report, Hensoldt's projected financial performance appears quite optimistic.
• Take a closer look at Hensoldt's balance sheet health here in our report.

RENK Group (XTRA:R3NK)

Overview: RENK Group AG specializes in the design, engineering, production, testing, and servicing of customized drive systems both in Germany and internationally, with a market cap of €6.94 billion.

Operations: The company's revenue is primarily derived from its Vehicle Mobility Solutions segment at €736.77 million, followed by Marine & Industry at €324.40 million and Slide Bearings at €126.77 million.

Estimated Discount To Fair Value: 18.3%

RENK Group, trading at €69.38, is undervalued relative to its estimated fair value of €84.89 based on DCF analysis. Earnings are projected to grow significantly at 29.35% annually over the next three years, outpacing the German market's growth rate. Despite high share price volatility and substantial debt levels, RENK's recent Q1 results showed a turnaround with a net income of €0.681 million compared to a loss last year, supporting its potential for value creation.

• According our earnings growth report, there's an indication that RENK Group might be ready to expand.
• Navigate through the intricacies of RENK Group with our comprehensive financial health report here.

Make It Happen

• Explore the 178 names from our Undervalued European Stocks Based On Cash Flows screener here.
• Already own these companies? Link your portfolio to Simply Wall St and get alerts on any new warning signs to your stocks.
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Ready For A Different Approach?

• Explore high-performing small cap companies that haven't yet garnered significant analyst attention.
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• 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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