(BFM Stock Exchange) – Based on Factseet data, News Bulletin 247 classified in an infographic the values ​​with the most demanding multiple in terms of expected benefits. It comes out, to simplify, that what is beautiful is expensive.

It is a current concept on the stock market but which may be a little confusing for a neophyte: the expensive or cheap nature of an action.

This idea of ​​”prices” should not be confused with the course displayed by an action, that is to say its nominal. It is not because the action of a company is worth 1,000 euros and that of another company 10 euros that the first is necessarily more expensive on the stock market than the second.

The Berkshire Hathaway (Class A) action, the Warren Buffett investment company is worth more than $ 700,000 at present while that of Nvidia rated around $ 128. However, the debates on the too high valuation of Nvidia are much more recurrent and animated than those on Berkshire Hathaway.

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The PER to assess the price

All this to say that the price displayed by an action does not say if a title is expensive or not. For this, the market analysis goes through the multiple valuation.

This amounts to determining how much a business is worth in relation to the expected results. The most often used tool remains PER or “Price Earning Ratio”. This ratio is calculated by dividing market capitalization (the value of all shares) by the expected benefits of a company. Or, what comes to the same time, by dividing its scholarship course through profit by action.

Simple example: if a company has a market capitalization of 5 billion euros for a profit expected in 2025 of 500 million euros, its PER 2025 is 5000/500 or 10.

The higher the PER, the more demanding the valuation (theoretically), since investors agree to pay more for future benefits of the company.

What are the most “dear” groups of the CAC 40? To determine this, we compiled the per 2025 (the profit expected in 2025) of the 40 residents of the Parisian index via the database of FactstSet

. The result is in the infographic below.

Note that, like any multiple comparison, the per has its limits. According to the sectors, other ratios are sometimes used or even privileged, such as that reporting the business value (equity and debts included) to the expected turnover or the expected operating profit. For banks for example, in addition to the PER, analysts use the market capitalization compared to the company’s accounting value (“tangible book value”).

Figures to contextualize

What to remember from this infographic? First education: it is not because a company is more “expensive” than another and therefore displays a higher PER, that it is necessarily a “better” student on the stock market.

Kering exchanges the benefits expected in 2025 for 12.7 times for Saint-Gobain 20.8 times. Yet Saint-Gobain was a part in 2024 (+46%) as in 2023 (+28.6%) of the five highest increases in CAC 40, unlike Kering, which has suffered in the past two years (-16.1 % then -40%).

In reality, some sectors display multiple structurally higher than others, which may depend, for example, on their growth prospects. Compare the PER of Saint-Gobain with that of Kering, amounts, ultimately, to compare cabbage and carrots.

“It is not easy to define what is a ‘good’ or a ‘bad’ per. Like many elements on the financial markets, it is difficult to apply a strict rule. To better understand the valuation of ‘A company, it is advisable to analyze it in the context of the entire index or the sector in which it operates, “explains the IG Markets broker.

The very cyclical sectors traditionally exchange with multiple stockings. The automobile and the bank in particular. Stellantis and Renault are at the tail of the CAC 40 ranking, with PERs of 4.6 and 4.7, while the three French banks, Société Générale, BNP Paribas and Crédit Agricole SA, display multiples between 6 And 7. It is also for this reason that EcelorMittal, which evolves in a cyclic sector, the steel industry, also appears in the bottom of the ranking.

Mature sectors, such as telecoms, energy or distribution are also often “little” valued.

Teleperformance (per 5.3) and Edenred (13.6), have known large “deracting” in recent years, that is to say that their multiple scholarship holders have deflated and that them therefore has diminished. This because the perception of the market on these titles has deteriorated.

The first has notably suffered fears that generative artificial intelligence upsets its activity model. The second suffered from a slight slowdown in its growth and especially concerns about an unfavorable development of regulations in Italy (where a law is actually in preparation) but also in France and Brazil.

What’s beautiful is expensive

On the side of the highest PERs, we note that luxury (L’Oréal included) is well represented. Despite a difficult 2024 year, these companies have displayed remarkable growth prospects in the past, as well as certain resilience to economic cycles. Their business models are also appreciated.

The so -called “quality” companies are (logically) as well valued. In a previous article, we determined what values ​​of the CAC 40 displayed the highest increases over 3 years, 5 years, 10 years. Three names returned to these different rankings: Schneider Electric, Safran and Hermès.

These three groups are again included in “the top 10” of the most expensive CAC 40 companies. Safran is fourth (29.2) and Schneider Electric Sixth (25.2). Their relevant positions on their markets and their executions appreciated by analysts explain why their PERs are so high.

Schneider Electric surfs mega-tendencies such as the electrification of the economy and the energy transition, with high-added products such as software consequences. Safran takes advantage of the growth of air traffic and its activities that are both very dynamic and very profitable after-sales (maintenance, sale of spare parts), thanks to the gigantic base installed of aircraft engines sold by CFM International , his joint venture with Ge Aero.

To summarize, “what is beautiful is expensive”. And therefore quality companies have a price.

This is particularly true for Hermès, absolute champion of the ranking, with a PER of 57.3. The best student of luxury is therefore, by far, the most expensive value of the CAC 40. Valorization is to tell the only real argument that analysts regularly invoke so as not to advise to buy the title.

Hermès, the essential

However, Hermès may be dear, her action goes up. The title signs the highest increase in CAC 40 over 10 years, and, last year, the Merier-Maroquerier displayed the best performance of “Kohl” (Kering, L’Oréal, Hermès, LVMH), with a progression of 21%.

The group combines both defensive assets and growth that seems to resist all the events. Despite its valuation, several design offices have recently been purchased on the title. HSBC did it in December. Stifel for his part took the plunge in early January. “Hermès has proven his ability to outperform in good as well as in bad years by offering prospects for attractive and relatively less cyclical sales growth,” wrote the financial intermediary.

“A very high PER ratio does not necessarily mean that expectations have become too high,” recalls Ig Markets. “Let us take the classic example of Amazon whose per current increased from more than 70 in early 2011 to 130 in the middle of that same year. Despite this, the action increased by 46% during the same period and continued its rise In the five years that followed, “said the broker.

Among the most expensive values ​​of the CAC 40 is also Dassault Systèmes (PER of 29.2). The publisher of professional software evolves in a sector which benefits from high multiple, due to both robust growth prospects but also a large recurring income base, which grants high visibility to investors.

Essilorluxottica (34.6) presents a very resilient activity, combined with a significant capacity for innovation. “The valuation is high, but the long -term growth prospects are attractive, thanks to multiple initiatives in terms of products (…) which are added to the main activity in the field of optics”, recently underlined royal Bank of Canada. Valuation can also integrate a speculative dimension since Meta said they consider taking a minority stake in its capital.