Yahoo Finance Exploring Undervalued Opportunities: 3 German Exchange Stocks With Discounts Ranging From 33.4% To 42.5%
Amid a backdrop of moderate gains and political stability across European markets, Germany's DAX index has shown resilience with a notable increase of 0.90%. As investors navigate this environment, identifying stocks that appear undervalued could present opportunities for those looking to potentially enhance their portfolios in line with current market conditions.
Top 10 Undervalued Stocks Based On Cash Flows In Germany
Name | Current Price | Fair Value (Est) | Discount (Est) |
Novem Group (XTRA:NVM) | €5.60 | €10.78 | 48% |
Verbio (XTRA:VBK) | €17.50 | €28.29 | 38.2% |
elumeo (XTRA:ELB) | €2.44 | €4.79 | 49% |
MTU Aero Engines (XTRA:MTX) | €228.60 | €397.58 | 42.5% |
Stratec (XTRA:SBS) | €47.15 | €80.18 | 41.2% |
CHAPTERS Group (XTRA:CHG) | €23.80 | €44.75 | 46.8% |
SBF (DB:CY1K) | €2.84 | €5.24 | 45.8% |
Your Family Entertainment (DB:RTV) | €2.40 | €4.07 | 41.1% |
Redcare Pharmacy (XTRA:RDC) | €117.20 | €197.69 | 40.7% |
Dr. Hönle (XTRA:HNL) | €19.75 | €33.22 | 40.5% |
Here's a peek at a few of the choices from the screener
MTU Aero Engines
Overview: MTU Aero Engines AG operates in the development, manufacture, marketing, and maintenance of commercial and military aircraft engines and industrial gas turbines globally, with a market capitalization of approximately €12.30 billion.
Operations: The company generates revenue primarily through its Commercial Maintenance Business (MRO) and Commercial and Military Engine Business (OEM), which recorded revenues of €4.35 billion and €1.27 billion respectively.
Estimated Discount To Fair Value: 42.5%
MTU Aero Engines, with a current trading price of €228.6, significantly undercuts our estimated fair value of €397.58, marking it as highly undervalued based on discounted cash flows. Despite a slight dip in net income and earnings per share in its recent Q1 results—€126 million and €2.35 respectively—it's poised for robust growth. Forecasts predict an impressive profit surge at 35.5% annually over the next three years alongside a revenue increase of 12.2% per year, outpacing the German market's 5.2%. Additionally, MTU's projected return on equity stands at an advantageous 20.3%, further highlighting its potential financial health improvement within this period.
Redcare Pharmacy
Overview: Redcare Pharmacy NV is an online pharmacy operating across the Netherlands, Germany, Italy, Belgium, Switzerland, Austria, and France with a market capitalization of approximately €2.38 billion.
Operations: The company generates revenue primarily through its operations in the DACH region (€1.62 billion) and other international markets (€0.37 billion).
Estimated Discount To Fair Value: 40.7%
Redcare Pharmacy's recent earnings show a sales increase to €560.22 million from €372.05 million year-over-year, with a reduced net loss of €7.81 million. Currently priced at €117.2, the stock is considered undervalued against our fair value estimate of €197.69, marking a 40.7% discrepancy favoring potential growth opportunities. Expected to turn profitable within three years, its revenue growth forecast at 17% annually surpasses Germany's average (5.2%). However, its projected return on equity remains low at 12.9%.
SAP
Overview: SAP SE, along with its subsidiaries, offers applications, technology, and services globally and has a market capitalization of approximately €209.86 billion.
Operations: The company generates €31.81 billion from its Applications, Technology & Services segment.
Estimated Discount To Fair Value: 33.4%
SAP SE, priced at €181.06, is valued significantly below our fair value estimate of €271.85, reflecting a substantial undervaluation based on discounted cash flows. The company's earnings are expected to grow robustly by 33.5% annually over the next three years, outpacing the German market's average. Recent strategic alliances and technological integrations aim to enhance operational efficiencies in complex manufacturing sectors, potentially bolstering SAP's financial performance despite a forecasted low return on equity of 16.1%.
Our earnings growth report unveils the potential for significant increases in SAP's future results.
Take a closer look at SAP's balance sheet health here in our report.
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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.
Companies discussed in this article include XTRA:MTX XTRA:RDC and XTRA:SAP.
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