Back to top

Image: Bigstock

Are Investors Undervaluing Air France (AFLYY) Right Now?

Read MoreHide Full Article

Here at Zacks, we focus on our proven ranking system, which places an emphasis on earnings estimates and estimate revisions, to find winning stocks. But we also understand that investors develop their own strategies, so we are constantly looking at the latest trends in value, growth, and momentum to find strong companies for our readers.

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 tried-and-true metrics and fundamental analysis to find companies that they believe are undervalued at their current share price levels.

In addition to the Zacks Rank, investors looking for stocks with specific traits can utilize our Style Scores system. Of course, value investors will be most interested in the system's "Value" category. Stocks with "A" grades for Value and high Zacks Ranks are among the best value stocks available at any given moment.

Air France (AFLYY - Free Report) is a stock many investors are watching right now. AFLYY is currently sporting a Zacks Rank of #1 (Strong Buy) and an A for Value. The stock is trading with P/E ratio of 4.70 right now. For comparison, its industry sports an average P/E of 10.47. Over the last 12 months, AFLYY's Forward P/E has been as high as 7.75 and as low as 3.09, with a median of 4.43.

Investors should also note that AFLYY holds 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 0.88. Over the past 52 weeks, AFLYY's PEG has been as high as 0.59 and as low as 0.22, with a median of 0.45.

Another notable valuation metric for AFLYY is its 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 company's current P/B looks solid when compared to its industry's average P/B of 2.46. AFLYY's P/B has been as high as 2.16 and as low as 1.12, with a median of 1.46, over the past year.

Finally, investors should note that AFLYY has a P/CF ratio of 2.03. This metric takes into account a company's operating cash flow and can be used to find stocks that are undervalued based on their solid cash outlook. AFLYY's P/CF compares to its industry's average P/CF of 6.25. Over the past year, AFLYY's P/CF has been as high as 3.75 and as low as 1.25, with a median of 2.04.

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.


See More Zacks Research for These Tickers


Normally $25 each - click below to receive one report FREE:


Air France-KLM SA (AFLYY) - free report >>

Published in