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Should Value Investors Buy Air France (AFLYY) Stock?

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The proven Zacks Rank system focuses on earnings estimates and estimate revisions to find winning stocks. Nevertheless, we know that our readers all have their own perspectives, so we are always looking at the latest trends in value, growth, and momentum to find strong picks.

Of these, value investing is easily one of the most popular ways to find great stocks in any market environment. Value investors use tried-and-true metrics and fundamental analysis to find companies that they believe are undervalued at their current share price levels.

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.

Air France (AFLYY - Free Report) is a stock many investors are watching right now. AFLYY is currently holding a Zacks Rank of #1 (Strong Buy) and a Value grade of A. The stock has a Forward P/E ratio of 4.60. This compares to its industry's average Forward P/E of 10.46. Over the past 52 weeks, AFLYY's Forward P/E has been as high as 7.75 and as low as 3.09, with a median of 4.43.

We also note that AFLYY holds a PEG ratio of 0.45. This popular metric is similar to the widely-known P/E ratio, with the difference being that the PEG ratio also takes into account the company's expected earnings growth rate. AFLYY's industry currently sports an average PEG of 0.88. Over the last 12 months, AFLYY's PEG has been as high as 0.59 and as low as 0.16, with a median of 0.40.

Investors should also recognize that AFLYY has a P/B ratio of 1.54. 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 2.20. Over the past 12 months, AFLYY's P/B has been as high as 2.16 and as low as 1.12, with a median of 1.44.

Finally, investors will want to recognize that AFLYY has a P/CF ratio of 1.97. 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. AFLYY's P/CF compares to its industry's average P/CF of 5.75. Over the past 52 weeks, AFLYY's P/CF has been as high as 3.75 and as low as 1.17, with a median of 2.03.

These are only a few of the key metrics included in Air France'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, AFLYY looks like an impressive value stock at the moment.


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