E.D.F.
EDF
Real-time Euronext Paris - 03/24 09:08:12 am
7.635EUR
+0.04%

An opportunity over the medium term?

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Laurent Polsinelli
Index and derivatives Analyst

Strategy published on : 03/20/2017 | 08:47

long trade
Live

Entry price : 7.785€
Target : 8.3€
Stop-loss : 7.18€
Potential : 6.62%

The decline over the past weeks has brought the price of E.D.F. shares back to an important technical support level at 7.18 EUR. This represents an opportunity to take advantage of these prices levels.
Summary

● In view of fundamental criteria, the company is among low performers as far as mid or long-term investment strategy is concerned.


Strengths

● The current area is a good opportunity for investors interested in buying the stock in a mid or long-term perspective. Indeed, the share is moving closer to its lower bound at EUR 7.18 EUR in weekly data.

● Graphically speaking, the timing seems perfect for purchasing the stock close to the EUR 7.45 support.

● The company has attractive valuation levels with a low EV/sales ratio compared with its peers.

● Its low valuation, with P/E ratio at 8.7 and 10.62 for the ongoing fiscal year and 2018 respectively, makes the stock pretty attractive with regard to earnings multiples.

● The company is one of the best yield companies with high dividend expectations.

● The difference between current prices and the average target price is rather important and implies a significant appreciation potential for the stock.


Weaknesses

● According to Thomson-Reuters' forecast, revenue growth prospects are expected to be very low for the next fiscal years.

● The group shows a rather high level of debt in proportion to its EBITDA.

● Sales estimates for the next fiscal years vary from one analyst to another. This clearly highlights a lack of visibility into the company's future activity.

● The group usually releases earnings worse than estimated.

● For the last twelve months, sales expectations have been significantly downgraded, which means that less important sales volumes are expected for the current fiscal year over the previous period.

● For the last twelve months, the analysts covering the company have given a bearish overview of EPS estimates, resulting in frequent downward revisions.

● For the past year, analysts have significantly revised downwards their profit estimates.

● Below the resistance at 9.53 EUR, the stock shows a negative configuration when looking looking at the weekly chart.

Zonebourse.com 2017
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