Euronext Paris presents OVH Groupe and two other shares estimated to be below intrinsic value

With the French market experiencing a noticeable rally, with the CAC 40 index up 2.62%, investors are keeping a close eye on potential opportunities in this bullish environment. In this context, identifying stocks that are trading below their intrinsic value can offer attractive prospects for those looking to diversify or strengthen their portfolios in a dynamic market environment.

Top 10 Undervalued Stocks Based on Cash Flow in France

Click here to see the full list of the 15 stocks in our Euronext Paris undervalued stock ranking based on cash flow.

We’ll take a look at some of the top picks from our selection tool.

Overview: OVH Groupe SA is a global provider of public and private cloud services, shared hosting and dedicated server solutions with a market capitalization of approximately €1.05 billion.

Operations: The company’s revenues are generated in three main segments: Public Cloud (EUR 169.01 million), Private Cloud (EUR 589.61 million) and Web Cloud (EUR 185.43 million).

Estimated discount from fair value: 26.1%

OVH Groupe, valued at €5.52, shows potential as an undervalued stock based on cash flow, trading 26.1% below its estimated fair value of €7.47. Despite a recently volatile share price, OVH’s financial outlook is promising, with an expected annual revenue growth of 10.8%, exceeding the 5.7% in the French market. Furthermore, profitability is forecast within three years, in line with above-average market growth forecasts. However, the projected return on equity remains low at 1.7%. Recent product line innovations and strategic management appointments suggest a focus on sustainable growth and technological advancement.

The story continues

Overview: Tikehau Capital is a private equity and venture capital firm that offers a variety of financial products, including secured loans, equity and mezzanine. Its market capitalization is approximately €3.99 billion.

Operations: The company’s revenues are divided into two main segments: investment activities, which generated EUR 179.19 million, and asset management activities, which generated EUR 322.32 million.

Estimated discount from fair value: 29.7%

Tikehau Capital, valued at EUR 23.05, is identified as undervalued based on the DCF analysis, with a valuation gap of 29.7% below the estimated fair value of EUR 32.77. The company’s earnings are expected to grow by 30.88% per year, significantly exceeding the French market forecast of 10.9%. Despite solid revenue growth forecasts (20.1% per year), its return on equity is expected to remain modest at 12.6%. Recent strategic partnerships and equity participations in Nikko Asset Management aim to strengthen Tikehau’s investment capabilities in Asia, with a focus on its decarbonization strategy.

Overview: Vivendi SE, a France-based entertainment, media and communications company operating in Europe, the Americas, Asia/Oceania and Africa, with a market capitalization of €11.16 billion.

Operations: The company’s revenues are generated primarily through Canal+ Group (€6.06 billion), followed by Havas Group (€2.87 billion), Lagardère (€0.67 billion), Gameloft (€0.31 billion) and Prisma Media (€0.31 billion).

Estimated discount from fair value: 33.9%

Vivendi, currently trading at €10.89, is significantly undervalued, with a DCF-based fair value of €16.47, a 33.9% discount. The company’s revenues rose to €4.27 billion in Q1 2024, showing strong growth potential with expected full-year revenue and earnings growth of 18.5% and 29.3%, respectively – both outpacing the French market averages of 5.7% and 10.9%. However, its return on equity is forecast to remain subdued at 5.9%. Recent legal settlements have also resolved long-standing disputes without any admission of liability, potentially stabilizing the stock’s future performance.

Seize the opportunity

Ready to try different investing styles?

This Simply Wall St article is for general information purposes only. We provide commentary based solely on historical data and analyst forecasts, using an unbiased methodology, and our articles are not intended to provide financial advice. They are not recommendations 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, focused analysis based on fundamentals. Please note that our analysis may not reflect the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

This article discusses companies such as ENXTPA:OVHENXTPA:TKO and ENXTPA:VIV

Have feedback on this article? Concerned about the content? Contact us directly. Alternatively, send an email to [email protected]