The Mondadori stock was, together with BFC Media, the only stock in the publishing sector that had a positive return in the last year. This strength of the stock is also reflected in the current graphical setting which, despite being bearish, is at non-critical levels that could also favor a prompt restart to the upside. However, we must be careful as next week could trigger a decline on Mondadori shares.
The prices, in fact, are very close to the support in the 1.722 euro area, a level that in the past has favored the restart to the upside. This is, therefore, the level to be monitored with extreme attention in closing in the coming weeks. Its break, in fact, could open upon reaching the most probable target in the 1.497 area (1st price target). Failure to maintain this level, then, could favor a bearish acceleration whose most probable target could be placed in the € 0.909 area.
Only a weekly close above € 1.86 could favor the recovery of the rise whose maximum bullish extension could go to the 3 euro area.
The evaluation of the Mondadori stock
From the valuation point of view, Mondadori shares, as reported in specialized magazines, show strong margins for improvement. If we consider, for example, the price / earnings ratio, the undervaluation of the stock is around 50%. With a price / earnings ratio of 9.26 for the current fiscal year and 8.5 for the 2023 fiscal year, the stock’s valuation levels are very low in terms of earnings multiples.
A level also confirmed by the fair value, calculated with the discounted cash flow method, which expresses an undervaluation of approximately 60%. Furthermore, the company enjoys attractive valuation levels with a relatively low EV / Sales ratio compared to other companies in the industry.
This strong level of undervaluation is also confirmed by the opinion of analysts who have an average consensus to buy and an average target price that expresses an undervaluation of around 70%.
There is also another aspect to consider. Over the past 12 months, analysts have largely revised upward the profitability estimates for the next few years. Furthermore, the increase in revisions to earnings per share looks very positive in recent months. Analysts are now expecting higher profitability than in the past.
Next week it could trigger a drop on Mondadori shares: the indications of the graphical analysis
The stock title Mondadori (MIL: MN) closed the session on 17 June at 1.75 euros, down by 2.13% compared to the previous close.
Weekly time frame
The first sessions of next week could prevent the Ftse Mib Future from reaching 20,000