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Are Investors Undervaluing Air France (AFLYY) Right Now?

Here at Zacks, our focus is on the proven Zacks Rank system, which emphasizes earnings estimates and estimate revisions to find great stocks. Nevertheless, we are always paying attention to the latest value, growth, and momentum trends to underscore strong picks.

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.

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.

One stock to keep an eye on is Air France (AFLYY). AFLYY is currently sporting a Zacks Rank of #1 (Strong Buy), as well as a Value grade of A. The stock is trading with P/E ratio of 6.25 right now. For comparison, its industry sports an average P/E of 8.70. AFLYY's Forward P/E has been as high as 7.75 and as low as 3.09, with a median of 4.39, all within the past year.

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 PEG compares to its industry's average PEG of 0.72. AFLYY's PEG has been as high as 0.59 and as low as 0.22, with a median of 0.48, all within the past year.

We should also highlight that AFLYY has a P/B ratio of 1.43. The P/B is a method of comparing a stock's market value to its book value, which is defined as total assets minus total liabilities. AFLYY's current P/B looks attractive when compared to its industry's average P/B of 2.57. Over the past 12 months, AFLYY's P/B has been as high as 1.96 and as low as 1.02, with a median of 1.30.

Finally, investors should note that AFLYY has a P/CF ratio of 2.13. 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 5.73. Over the past 52 weeks, AFLYY's P/CF has been as high as 3.40 and as low as 1.51, with a median of 1.92.

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

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.


The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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