Three shares of the SIX Swiss Exchange with discounts on intrinsic value between 14.2% and 39.9%

Despite a generally positive performance during the day, the Swiss market closed with a slight decline, reflecting a cautious mood among investors. In such an environment, identifying stocks that appear undervalued relative to their intrinsic value could offer interesting opportunities for those looking to invest in potentially resilient assets in this market context.

The 10 most undervalued stocks in Switzerland based on cash flows

Click here to see the full list of 14 stocks from our Undervalued SIX Swiss Exchange Stocks Based on Cash Flows screener.

Let’s examine some outstanding options from the results in the screener

Overview: Barry Callebaut AG is active in the production and sale of chocolate and cocoa products and has a market capitalization of around CHF 8.58 billion.

Operations: The company’s revenue comes mainly from the Global Cocoa division, which generated CHF 5.31 billion.

Estimated discount to fair value: 14.2%

Barry Callebaut is trading at CHF 1568, below its estimated fair value of CHF 1827.66, suggesting an undervaluation based on a discounted cash flow analysis. Despite a very volatile share price recently and debt not well covered by operating cash flow, the company’s earnings are expected to grow by 25.2% annually, outperforming the Swiss market at 8.3%. However, return on equity could remain low at 14.7% in three years. The latest results showed a significant decline in net profit from CHF 235.49 million to CHF 77.93 million year-on-year.

Overview: Sika AG is a specialty chemicals company that offers products and systems for bonding, sealing, dampening, reinforcing and protecting in the construction and automotive industries worldwide and has a market capitalization of CHF 41.33 billion.

Operations: Sika generates CHF 9.45 billion from construction products and CHF 1.78 billion from industrial manufacturing products.

Estimated discount to fair value: 23.7%

Sika is considered undervalued at a current price of CHF 257.60 based on DCF models and has a significant gap to its fair value of CHF 337.76. Despite recent shareholder dilution and high debt levels, the company’s strategic expansions such as the new plant in Liaoning and the synthetic macrofiber plant in Peru underline its growth trajectory. Earnings are expected to be better than those of the Swiss market and sales and profit growth forecasts are robust.

Overview: Sulzer Ltd is a global company specializing in fluid power and chemical processing solutions with a market capitalization of CHF 4.51 billion.

Operations: The company’s sales are distributed across three main segments: Chemtech with CHF 772.50 million, Services with CHF 1.15 billion and Flow Equipment with CHF 1.35 billion.

Estimated discount to fair value: 39.9%

Sulzer is trading at CHF 133.40, well below its estimated fair value of CHF 221.87, which represents an undervaluation of 39.9% according to a DCF analysis. Despite an unstable dividend history, the company has recorded a significant earnings growth of 701% over the past year and is expected to increase its earnings by 9.66% annually. Sales forecasts also exceed Swiss market expectations with a steady annual increase of 5%, underlining Sulzer’s potential as an undervalued stock in Switzerland based on cash flows.

The central theses

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This Simply Wall St article is of a general nature. We comment based solely on historical data and analyst forecasts, using an unbiased methodology. Our articles are not intended as financial advice. They do not constitute a recommendation to buy or sell stocks and do not take into account your objectives or financial situation. Our goal is to provide you with long-term analysis based on fundamental data. Note that our analysis may not take into account the latest price-sensitive company announcements or qualitative materials. Simply Wall St does not hold any of the stocks mentioned.

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