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As European markets grapple with the repercussions of higher-than-expected U.S. trade tariffs, major indexes like the STOXX Europe 600 have experienced their steepest declines in five years, reflecting broader global economic uncertainty. In this environment, identifying undervalued stocks can be crucial for investors seeking opportunities amidst volatility, as these stocks may offer potential value when market sentiment stabilizes.
Top 10 Undervalued Stocks Based On Cash Flows In Europe
| Name | Current Price | Fair Value (Est) | Discount (Est) |
| BFF Bank (BIT:BFF) | €7.225 | €14.09 | 48.7% |
| Mips (OM:MIPS) | SEK345.60 | SEK679.81 | 49.2% |
| Gentili Mosconi (BIT:GM) | €2.53 | €5.01 | 49.5% |
| LPP (WSE:LPP) | PLN15800.00 | PLN30596.39 | 48.4% |
| Etteplan Oyj (HLSE:ETTE) | €11.35 | €22.66 | 49.9% |
| Digital Workforce Services Oyj (HLSE:DWF) | €3.56 | €6.91 | 48.5% |
| Komplett (OB:KOMPL) | NOK11.45 | NOK22.45 | 49% |
| 3U Holding (XTRA:UUU) | €1.425 | €2.76 | 48.4% |
| Bactiguard Holding (OM:BACTI B) | SEK34.00 | SEK67.43 | 49.6% |
| Hybrid Software Group (ENXTBR:HYSG) | €3.49 | €6.75 | 48.3% |
Here's a peek at a few of the choices from the screener.
BFF Bank
Overview: BFF Bank S.p.A. operates in non-recourse factoring and credit management for public administration bodies and private hospitals across several European countries, with a market cap of €1.36 billion.
Operations: The company generates revenue of €486.98 million from its financial services, focusing on commercial activities.
Estimated Discount To Fair Value: 48.7%
BFF Bank is trading at €7.23, significantly below its estimated fair value of €14.09, suggesting it may be undervalued based on cash flows. Despite a high debt level, the bank's earnings grew to €215.68 million in 2024 from €171.66 million in 2023 and are forecast to grow annually by 7.5%, outpacing the Italian market slightly. However, revenue growth is modest at 5.4% per year with an unstable dividend track record.
Salvatore Ferragamo
Overview: Salvatore Ferragamo S.p.A. designs, manufactures, and markets luxury goods for men and women across various regions including Europe, North America, Japan, the Asia Pacific, and Central and South America with a market cap of €878.09 million.
Operations: The company's revenue primarily comes from its footwear segment, which generated €1.04 billion.
Estimated Discount To Fair Value: 39.3%
Salvatore Ferragamo is trading at €5.3, below its estimated fair value of €8.72, indicating potential undervaluation based on cash flows. Despite recent volatility and a net loss of €68.09 million in 2024 compared to a profit the previous year, revenue is expected to grow faster than the Italian market at 5.3% annually. Analysts agree on a potential price rise of 23.8%, though return on equity remains low at 5.7%.