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Is Sanofi (SNY) a Great Value Stock Right Now?

Zacks Equity Research

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.

Luckily, Zacks has developed its own Style Scores system in an effort to find stocks with specific traits. Value investors will be interested in the system's "Value" category. Stocks with both "A" grades in the Value category and high Zacks Ranks are among the strongest value stocks on the market right now.

One company to watch right now is Sanofi (SNY). SNY is currently sporting a Zacks Rank of #2 (Buy) and an A for Value. The stock is trading with P/E ratio of 12.38 right now. For comparison, its industry sports an average P/E of 14.08. Over the last 12 months, SNY's Forward P/E has been as high as 14.20 and as low as 11.82, with a median of 13.11.

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 2.67. This compares to its industry's average P/S of 3.57.

Finally, we should also recognize that SNY has a P/CF ratio of 12.55. This metric takes into account a company's operating cash flow and can be used to find stocks that are undervalued based on their solid cash outlook. SNY's current P/CF looks attractive when compared to its industry's average P/CF of 14.61. Over the past 52 weeks, SNY's P/CF has been as high as 13.50 and as low as 10.62, with a median of 11.68.

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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