Are Investors Undervaluing Sanofi (SNY) 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.
Of these, perhaps no stock market trend is more popular than value investing, which is a strategy that has proven to be successful in all sorts of market environments. 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.
Sanofi (SNY) is a stock many investors are watching right now. SNY is currently sporting a Zacks Rank of #2 (Buy), as well as a Value grade of A. The stock is trading with a P/E ratio of 13.18, which compares to its industry's average of 14.76. Over the past 52 weeks, SNY's Forward P/E has been as high as 15.37 and as low as 10.69, with a median of 13.73.
Investors will also notice that SNY has a PEG ratio of 1.70. 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. SNY's PEG compares to its industry's average PEG of 1.97. Over the last 12 months, SNY's PEG has been as high as 2.28 and as low as 1.47, with a median of 1.88.
Value investors also use the P/S ratio. The P/S ratio is is calculated as price divided by sales. Some people prefer this metric because sales are harder to manipulate on an income statement. This means it could be a truer performance indicator. SNY has a P/S ratio of 3.14. This compares to its industry's average P/S of 4.2.
Finally, investors should note that SNY has a P/CF ratio of 10.51. This figure highlights a company's operating cash flow and can be used to find firms that are undervalued when considering their impressive cash outlook. SNY's P/CF compares to its industry's average P/CF of 15.31. Within the past 12 months, SNY's P/CF has been as high as 11.32 and as low as 6.62, with a median of 10.18.
These are just a handful of the figures considered in Sanofi's great Value grade. Still, they help show that the stock is likely being undervalued at the moment. Add this to the strength of its earnings outlook, and we can clearly see that SNY is an impressive value stock right now.
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