Safran: I Went 'Hold' Too Early, But It's Overvalued Now
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Wolf ReportInvesting Group LeaderFollow5ShareSavePlay(14min)CommentsSummarySafran SA remains a Hold at a raised price target of €235/share, reflecting improved earnings but persistent valuation concerns.SAFRY trades at a 35x+ P/E, nearly double its 20-year average, with upside dependent on sustained high EPS growth or continued market premiumization.Risks include Boeing 737 MAX uncertainty, civil aviation cyclicality, and overreliance on aftermarket service revenue amid volatile end markets.Despite solid fundamentals and industry leadership, I prefer to wait for a more attractive entry point to SAFRY stock given current market exuberance. Jean-Luc Ichard/iStock Editorial via Getty Images It's time for me to update my thesis on Safran SA (SAFRY). This is unfortunately one of those companies where I went "Hold" too early. Remember, however, that I rated Safran a "Buy" long before it went here. So, evenThis article was written byWolf Report34.51K FollowersFollowWolf Report is a senior analyst and private portfolio manager with over 10 years of generating value ideas in European and North American markets.He covers the markets of Scandinavia, Germany, France, UK, Italy, Spain, Portugal and Eastern Europe in search of reasonably valued stock ideas.Analyst’s Disclosure:I/we have a beneficial long position in the shares of EADSY either through stock ownership, options, or other derivatives. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article. While this article may sound like financial advice, please observe that the author is not a US-based CFA engaged by the reader. It may be structured as such, but it is not financial advice. Investors/readers are required and expected to do their own due diligence and research prior to any investment. They generally are not appropriate for someone with limited capital, limited investment experience, or a lack of understanding for the necessary risk tolerance involved. I own the European/Scandinavian tickers (not the ADRs) of all European/Scandinavian companies listed in my articles. I own the Canadian tickers of all Canadian stocks I write about. Please note that investing in European/Non-US stocks comes with withholding tax risks specific to the company's domicile as well as your personal situation. Investors should always consult a tax professional as to the overall impact of dividend withholding taxes and ways to mitigate these.Seeking Alpha's Disclosure: Past performance is no guarantee of future results. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. Any views or opinions expressed above may not reflect those of Seeking Alpha as a whole. Seeking Alpha is not a licensed securities dealer, broker or US investment adviser or investment bank. Our analysts are third party authors that include both professional investors and individual investors who may not be licensed or certified by any institute or regulatory body.