Assessing Arkema (ENXTPA:AKE)’s Valuation After a Prolonged Share Price Slide Despite Rising Profits
Arkema (ENXTPA:AKE) has drifted lower this year, leaving the shares down roughly 28% year to date and about 31% over the past year, even as earnings and revenue continue to grow.
See our latest analysis for Arkema.
That slide reflects a steady loss of confidence rather than a single shock, with the 90 day share price return of minus 12.53 percent and five year total shareholder return of minus 35.15 percent underscoring that momentum is still fading despite improving profits.
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So with Arkema’s share price sliding even as profits climb and analysts see nearly 27 percent upside, is this a mispriced value opportunity for patient investors, or a market calmly discounting all the future growth already?
Most Popular Narrative Narrative: 21.2% Undervalued
With Arkema last closing at €51.30 against a narrative fair value of €65.06, the prevailing view leans toward material upside if the forecasts land.
The company's sustained emphasis on R&D and innovation (especially in differentiated materials for batteries, 3D printing, bio-based polymers, and advanced electronics) enhances Arkema's ability to introduce high-value, eco-friendly products that can command premium pricing, supporting long-term revenue growth and gross margin expansion.
Want to see how modest revenue growth, rising margins and a lower future earnings multiple still add up to a higher fair value? The full narrative spells out the numbers driving that conclusion.
Result: Fair Value of €65.06 (UNDERVALUED)
Have a read of the narrative in full and understand what's behind the forecasts.
However, prolonged macroeconomic weakness and intense Asian competition in specialty chemicals could pressure volumes and margins, potentially delaying any rerating despite Arkema’s strategic investments.
Find out about the key risks to this Arkema narrative.
Another Angle On Valuation
While the narrative fair value suggests upside, Arkema looks expensive on earnings today, with a price to earnings ratio of 30.4 times versus a European chemicals average of 18.3 times and a fair ratio of 24.1 times. Is the market overpaying now for growth that is still only promised?
See what the numbers say about this price — find out in our valuation breakdown.
Build Your Own Arkema Narrative
If you see Arkema’s story differently, or simply want to test your own assumptions against the data, you can construct a custom narrative in minutes, Do it your way.
A great starting point for your Arkema research is our analysis highlighting 2 key rewards and 3 important warning signs that could impact your investment decision.
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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.
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