Fnac Darty shares are trading close to a major technical resistance, which, if broken, could yield new upside potential and an increase in volatility. This scenario can be anticipated.
Summary
● The company has strong fundamentals. More than 70% of companies have a lower mix of growth, profitability, debt and visibility.
● The company presents an interesting fundamental situation from a short-term investment perspective.
Strengths
● The company's profit outlook over the next few years is a strong asset.
● With a P/E ratio at 11.08 for the current year and 9.73 for next year, earnings multiples are highly attractive compared with competitors.
● The company is one of the most undervalued, with an "enterprise value to sales" ratio at 0.31 for the 2021 fiscal year.
● The company appears to be poorly valued given its net asset value.
● Given the positive cash flows generated by its business, the company's valuation level is an asset.
● For the past year, analysts covering the stock have been revising their EPS expectations upwards in a significant manner.
● Analysts remain confident with respect to the group's activity and, more often than not, have revised upwards their earnings per share estimates.
● Analysts covering this company mostly recommend stock overweighting or purchase.
● Analyst opinion has improved significantly over the past four months.
● Over the past twelve months, analysts' opinions have been strongly revised upwards.
Weaknesses
● As estimated by analysts, this group is among those businesses with the lowest growth prospects.
● As a percentage of sales and without taking into account depreciation and amortization, the company has relatively low margins.
● The company has insufficient levels of profitability.
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Fnac Darty is No. 1 in France for distribution of cultural and leisure products. The group's activity is organized into 4 divisions:
- distribution of cultural and IT products and consumer electronics: books, toys, gaming consoles, music CDs, telephones, IT products (computers, tablets, peripherals, software, etc.), hi-fi products (televisions, stereo systems, DVD readers and recorders), cameras and video recorders, MP3 players, DVD films, household appliances, etc. The company operates through a network of stores (owned nearly 1,000 points of sale as of the end of 2023 worldwide) and via the Internet;
- sales of photo developing services;
- distribution of event tickets: concerts, theater productions, operas, expositions, circuses, museums, etc.;
- travel sales (Fnac Voyages).
Net sales are distributed geographically as follows: France and Switzerland (82.7%), Iberian Peninsula (9.3%), Belgium and Luxembourg (8%).