Thales and two other Euronext Paris stocks are expected to trade below their fair value

With a generally positive trend in European markets, with the French CAC 40 index posting modest gains, investors continue to look for opportunities they might otherwise have overlooked. In this context, identifying potentially undervalued stocks is particularly rewarding, as they can offer attractive entry points into a market supported by general economic optimism.

The 10 most undervalued stocks in France based on cash flow

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

Here’s a quick look at some of the choices from the screener.

Overview: Thales SA is a global company offering solutions in the defense, aerospace, digital identity and security, and transportation sectors and has a market capitalization of approximately €31.54 billion.

Operations: The company generates EUR 5.34 billion in the aerospace sector, EUR 3.42 billion in the digital identity and security sector and EUR 10.18 billion in the defense and security sector excluding digital I&S.

Estimated discount to fair value: 42.7%

Thales is trading at €152.60, significantly undervalued by 42.7% compared to its estimated fair value of €266.11. This represents a strong investment opportunity based on cash flow analysis. Despite a high level of debt and an unstable dividend history, Thales has promising financial prospects. Earnings are expected to grow by 16.44% annually and revenue is expected to grow by 6.3% per year, outperforming the French market growth rate of 5.7%. Recent strategic alliances in cybersecurity and air traffic management underscore the company’s commitment to expanding its market reach and improving its technological capabilities.

Overview: Tikehau Capital is a private equity and venture capital firm offering a variety of financing products such as senior secured loans, equity and mezzanine financing and has a market capitalization of approximately EUR 4.03 billion.

Operations: The company generates its revenue primarily from two segments: investment activities, which generated EUR 179.19 million, and asset management activities, which contributed EUR 322.32 million.

Estimated discount to fair value: 28.8%

Tikehau Capital is currently trading at €23.30, 28.8% below its fair value of €32.72, which suggests the company is undervalued based on cash flow analysis. Earnings are expected to grow 31.26% annually over the next three years, beating the French market’s forecast of 10.9%. However, dividend coverage by free cash flow is weak and profit margins have fallen to 35.2% from 53.2% last year. It recently entered into a strategic partnership with Nikko Asset Management to enhance investment opportunities in Asia.

Overview: Vivendi SE is a France-based entertainment, media and communications company with operations in Europe, the Americas, Asia/Oceania and Africa and a market capitalization of €11.29 billion.

Operations: Vivendi’s revenues are generated mainly by the Canal + Group (EUR 6.06 billion) and the Havas Group (EUR 2.87 billion), with smaller contributions from Lagardère (EUR 0.67 billion), Gameloft (EUR 0.31 billion), Prisma Media (EUR 0.31 billion), Vivendi Village (EUR 0.18 billion) and New Initiatives (EUR 0.15 billion).

Estimated discount to fair value: 32.7%

Vivendi is trading at €11.02, well below its fair value of €16.37, suggesting a possible undervaluation based on cash flow metrics. With expected annual earnings growth of 29.27% ​​over the next three years and revenue growth that also exceeds the French market average, the company’s financial prospects appear solid despite a low forecast return on equity of 6%. Recent strategic moves include plans to list Canal+ and the resolution of long-standing litigation, which could have a positive impact on future financial stability and market perception.

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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 are not 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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