As trade tensions escalate and consumer sentiment in Europe reaches its lowest point in nearly three years, the pan-European STOXX Europe 600 Index has seen a decline of 1.92%, with major indexes like Germany's DAX and France's CAC 40 also experiencing losses. In this climate of uncertainty, identifying stocks that are potentially trading below their fair value can offer opportunities for investors looking to capitalize on market inefficiencies.

Top 10 Undervalued Stocks Based On Cash Flows In Europe

Click here to see the full list of 179 stocks from our Undervalued European Stocks Based On Cash Flows screener.

We're going to check out a few of the best picks from our screener tool.

Safran

Overview: Safran SA, along with its subsidiaries, operates in the aerospace and defense sectors globally, with a market capitalization of approximately €85.31 billion.

Operations: Safran's revenue is primarily derived from its Aerospace Propulsion segment at €13.65 billion, followed by Aeronautical Equipment, Defense and Aerosystems at €10.62 billion, and Aircraft Interiors at €3.04 billion.

Estimated Discount To Fair Value: 33.1%

Safran is trading at €204.7, significantly below its estimated fair value of €305.81, making it potentially undervalued based on cash flows. Despite a net loss of €667 million in 2024, the company expects revenue to increase by approximately 10% in 2025 and is forecasted to become profitable within three years with earnings growing at 42.98% annually. Analysts agree on a potential price rise of 28.4%, and Safran recently announced an annual dividend increase to €2.90 per share payable in June 2025.

• Our expertly prepared growth report on Safran implies its future financial outlook may be stronger than recent results.
• Take a closer look at Safran's balance sheet health here in our report.

Partners Group Holding

Overview: Partners Group Holding AG is a private equity firm engaged in direct, secondary, and primary investments across private equity, real estate, infrastructure, and debt with a market cap of CHF26.45 billion.

Operations: The company's revenue segments comprise CHF1.34 billion from private equity, CHF182.10 million from real estate, CHF390.70 million from infrastructure, and CHF207.70 million from private credit.

Estimated Discount To Fair Value: 20.8%

Partners Group Holding is trading at CHF 1021, below its estimated fair value of CHF 1288.43, suggesting it may be undervalued based on cash flows. The firm's earnings have grown by 2.9% annually over the past five years and are forecast to grow at 11.5% per year, outpacing the Swiss market. Despite a high debt level and a dividend yield of 4.11% not fully covered by earnings or free cash flows, revenue growth is expected to exceed market averages at 13.3%.

• Our comprehensive growth report raises the possibility that Partners Group Holding is poised for substantial financial growth.
• Click here and access our complete balance sheet health report to understand the dynamics of Partners Group Holding.

Siemens Energy

Overview: Siemens Energy AG operates as a global energy technology company with a market cap of approximately €42.47 billion.

Operations: The company's revenue is primarily generated from its Gas Services segment (€10.95 billion), Siemens Gamesa (€10.38 billion), Grid Technologies (€9.68 billion), and Transformation of Industry (€5.31 billion).

Estimated Discount To Fair Value: 44.2%

Siemens Energy appears undervalued, trading at €53.74, significantly below its estimated fair value of €96.37 based on discounted cash flow analysis. Despite recent earnings challenges with net income dropping to €198 million from the previous year's €1.55 billion, the company's profitability is expected to improve markedly over the next three years. The potential sale of its Siemens Gamesa assets could streamline operations amidst cost pressures and bolster future cash flows as it navigates a volatile market landscape.

• Our earnings growth report unveils the potential for significant increases in Siemens Energy's future results.
• Delve into the full analysis health report here for a deeper understanding of Siemens Energy.

Summing It All Up

• Dive into all 179 of the Undervalued European Stocks Based On Cash Flows we have identified here.
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Ready For A Different Approach?

• Explore high-performing small cap companies that haven't yet garnered significant analyst attention.
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• Fuel your portfolio with companies showing strong growth potential, backed by optimistic outlooks both from analysts and management.

This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

Companies discussed in this article include ENXTPA:SAF SWX:PGHN and XTRA:ENR.

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