In This Article:
Let’s talk about the popular Crédit Agricole SA. (ENXTPA:ACA). The company’s shares saw its share price hover around a small range of €13.14 to €14.18 over the last few weeks. But is this actually reflective of the share value of the large-cap? Or is it currently undervalued, providing us with the opportunity to buy? Let’s take a look at Crédit Agricole’s outlook and value based on the most recent financial data to see if there are any catalysts for a price change. Check out our latest analysis for Crédit Agricole
Is Crédit Agricole still cheap?
Crédit Agricole appears to be overvalued by 59% at the moment, based on my discounted cash flow valuation. The stock is currently priced at €13.63 on the market compared to my intrinsic value of €8.55. This means that the opportunity to buy Crédit Agricole at a good price has disappeared! But, is there another opportunity to buy low in the future? Since Crédit Agricole’s share price is quite volatile, this could mean it can sink lower (or rise even further) in the future, giving us another chance to invest. This is based on its high beta, which is a good indicator for how much the stock moves relative to the rest of the market.
What does the future of Crédit Agricole look like?
Investors looking for growth in their portfolio may want to consider the prospects of a company before buying its shares. Although value investors would argue that it’s the intrinsic value relative to the price that matter the most, a more compelling investment thesis would be high growth potential at a cheap price. Crédit Agricole’s earnings over the next few years are expected to increase by 50.19%, indicating a highly optimistic future ahead. This should lead to more robust cash flows, feeding into a higher share value.
What this means for you:
Are you a shareholder? ACA’s optimistic future growth appears to have been factored into the current share price, with shares trading above its fair value. At this current price, shareholders may be asking a different question – should I sell? If you believe ACA should trade below its current price, selling high and buying it back up again when its price falls towards its real value can be profitable. But before you make this decision, take a look at whether its fundamentals have changed.
Are you a potential investor? If you’ve been keeping an eye on ACA for a while, now may not be the best time to enter into the stock. The price has surpassed its true value, which means there’s no upside from mispricing. However, the optimistic prospect is encouraging for ACA, which means it’s worth diving deeper into other factors in order to take advantage of the next price drop.