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Is Air France (AFLYY) Stock Undervalued Right Now?

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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.

Looking at the history of these trends, perhaps none is more beloved than value investing. This strategy simply looks to identify companies that are being undervalued by the broader market. Value investors use fundamental analysis and traditional valuation metrics to find stocks that they believe are being undervalued by the market at large.

Zacks has developed the innovative Style Scores system to highlight stocks with specific traits. For example, value investors will be interested in stocks with great grades in the "Value" category. When paired with a high Zacks Rank, "A" grades in the Value category are among the strongest value stocks on the market today.

One stock to keep an eye on is Air France (AFLYY - Free Report) . AFLYY is currently sporting a Zacks Rank of #1 (Strong Buy), as well as a Value grade of A. The stock has a Forward P/E ratio of 5.13. This compares to its industry's average Forward P/E of 10.48. Over the past year, AFLYY's Forward P/E has been as high as 7.75 and as low as 3.09, with a median of 4.94.

AFLYY is also sporting a PEG ratio of 0.45. This popular figure is similar to the widely-used P/E ratio, but the PEG ratio also considers a company's expected EPS growth rate. AFLYY's industry currently sports an average PEG of 0.68. Within the past year, AFLYY's PEG has been as high as 0.59 and as low as 0.16, with a median of 0.29.

Investors should also recognize that AFLYY has a P/B ratio of 1.58. The P/B ratio pits a stock's market value against its book value, which is defined as total assets minus total liabilities. This stock's P/B looks attractive against its industry's average P/B of 3.14. AFLYY's P/B has been as high as 2.21 and as low as 1.18, with a median of 1.56, over the past year.

Finally, investors will want to recognize that AFLYY has a P/CF ratio of 2.20. This figure highlights a company's operating cash flow and can be used to find firms that are undervalued when considering their impressive cash outlook. This company's current P/CF looks solid when compared to its industry's average P/CF of 6.43. Over the past year, AFLYY's P/CF has been as high as 3.75 and as low as 1.17, with a median of 1.77.

These figures are just a handful of the metrics value investors tend to look at, but they help show that Air France is likely being undervalued right now. Considering this, as well as the strength of its earnings outlook, AFLYY feels like a great value stock at the moment.


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