Back to top

Are Investors Undervaluing Sanofi (SNY) Right Now?

Read MoreHide Full Article

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.

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.

On top of the Zacks Rank, investors can also look at our innovative Style Scores system to find stocks with specific traits. For example, value investors will want to focus on the "Value" category. Stocks with high Zacks Ranks and "A" grades for Value will be some of the highest-quality value stocks on the market today.

One stock to keep an eye on is Sanofi (SNY - Free Report) . SNY is currently sporting a Zacks Rank of #2 (Buy) and an A for Value. The stock is trading with P/E ratio of 13.32 right now. For comparison, its industry sports an average P/E of 14.33. SNY's Forward P/E has been as high as 14.20 and as low as 11.82, with a median of 13.05, all within the past year.

Value investors also love the P/S ratio, which is calculated by simply dividing a stock's price with the company's sales. This is a prefered metric because revenue can't really be manipulated, so sales are often a truer performance indicator. SNY has a P/S ratio of 2.89. This compares to its industry's average P/S of 3.74.

Finally, investors should note that SNY has a P/CF ratio of 13.61. 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. This company's current P/CF looks solid when compared to its industry's average P/CF of 14.65. Within the past 12 months, SNY's P/CF has been as high as 13.69 and as low as 10.62, with a median of 11.68.

Value investors will likely look at more than just these metrics, but the above data helps show that Sanofi is likely undervalued currently. And when considering the strength of its earnings outlook, SNY sticks out at as one of the market's strongest value stocks.

In-Depth Zacks Research for the Tickers Above

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

Sanofi (SNY) - free report >>

Published in