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Is Air France (AFLYY) a Great Value Stock Right Now?

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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.

Considering these trends, value investing is clearly one of the most preferred ways to find strong stocks in any type of 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.

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 sporting a Zacks Rank of #2 (Buy), as well as an A grade for Value. The stock holds a P/E ratio of 5.19, while its industry has an average P/E of 8.84. 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 4.39.

Investors will also notice that AFLYY has 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 PEG compares to its industry's average PEG of 0.74. Within the past year, AFLYY's PEG has been as high as 0.59 and as low as 0.22, with a median of 0.47.

Another valuation metric that we should highlight is AFLYY's P/B ratio of 1.44. 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 solid versus its industry's average P/B of 2.47. Over the past 12 months, AFLYY's P/B has been as high as 2.05 and as low as 1.12, with a median of 1.43.

Finally, investors will want to recognize that AFLYY has a P/CF ratio of 1.85. This metric focuses on a firm's operating cash flow and is often used to find stocks that are undervalued based on the strength of their cash outlook. This company's current P/CF looks solid when compared to its industry's average P/CF of 5.60. Within the past 12 months, AFLYY's P/CF has been as high as 3.56 and as low as 1.62, with a median of 2.02.

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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