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Should Value Investors Buy BNP Paribas (BNPQY) Stock?

Here at Zacks, our focus is on the proven Zacks Rank system, which emphasizes earnings estimates and estimate revisions to find great stocks. Nevertheless, we are always paying attention to the latest value, growth, and momentum trends to underscore strong picks.

Of these, perhaps no stock market trend is more popular than value investing, which is a strategy that has proven to be successful in all sorts of market environments. Value investors use a variety of methods, including tried-and-true valuation metrics, to find these stocks.

Luckily, Zacks has developed its own Style Scores system in an effort to find stocks with specific traits. Value investors will be interested in the system's "Value" category. Stocks with both "A" grades in the Value category and high Zacks Ranks are among the strongest value stocks on the market right now.

One company to watch right now is BNP Paribas (BNPQY). BNPQY is currently sporting a Zacks Rank of #2 (Buy), as well as a Value grade of A. The stock has a Forward P/E ratio of 6.87. This compares to its industry's average Forward P/E of 7.58. BNPQY's Forward P/E has been as high as 8.49 and as low as 5.25, with a median of 6.94, all within the past year.

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We also note that BNPQY holds a PEG ratio of 0.35. This metric is used similarly to the famous P/E ratio, but the PEG ratio also takes into account the stock's expected earnings growth rate. BNPQY's industry currently sports an average PEG of 0.77. Over the past 52 weeks, BNPQY's PEG has been as high as 0.81 and as low as 0.34, with a median of 0.56.

Another notable valuation metric for BNPQY is its P/B ratio of 0.61. Investors use the P/B ratio to look at a stock's market value versus its book value, which is defined as total assets minus total liabilities. This company's current P/B looks solid when compared to its industry's average P/B of 1.45. Within the past 52 weeks, BNPQY's P/B has been as high as 0.69 and as low as 0.40, with a median of 0.50.

Finally, investors will want to recognize that BNPQY has a P/CF ratio of 4.45. This data point considers a firm's operating cash flow and is frequently used to find companies that are undervalued when considering their solid cash outlook. BNPQY's current P/CF looks attractive when compared to its industry's average P/CF of 13.31. BNPQY's P/CF has been as high as 5.01 and as low as 2.83, with a median of 4.46, all within the past year.

These are only a few of the key metrics included in BNP Paribas's strong Value grade, but they help show that the stock is likely undervalued right now. When factoring in the strength of its earnings outlook, BNPQY looks like an impressive value stock at the moment.

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Zacks Investment Research