Euronext
Note: This is a daily stock update and the information stands true as of 02/07/25, 09:00 CET.
Company Update:
Expert Opinion:
Consolidation of European exchange is bang in line with the strategy of Euronext. The deal looks good, especially as it is immediately earnings accretive before what we expect to be significant synergies by integrating ATHEX in the Euronext universe. There is still room for consolidation, especially in Central Europe. While we like Euronext's strategy, management and its very sound business, the valuation is quite stretched, and we see limited upside (actually 8% downside on the fundamentals). Furthermore, there are potentially negative elements down the road that need monitoring. For example, the announcement by Robinhood of the tokenization of American shares could become a direct threat to market venues. So far, this risk is limited in Europe, but the legal situation may evolve and catch up. Despite its strong fundamentals and the consolidation strategy, Euronext is too expensive for ourexpert's liking (PE of 22.6 in 2025 and 2026).
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Company Update:
The group confirmed advanced talks with the board of Athex, the Athens stock exchange, for a 100% takeover bid in Euronext shares.
The price discussed is €6.9 per share (a 14% premium on yesterday's close) with a conversion rate of 21.03 ATHEX shares for 1 Euronext share.
If realized under those terms, the deal would imply a €399m transaction price, valuing ATHEX at a 21x PE ratio making the deal immediately accretive as Euronext trades at a c. 25x PE ratio.
Consolidation of European exchange is bang in line with the strategy of Euronext. The deal looks good, especially as it is immediately earnings accretive before what we expect to be significant synergies by integrating ATHEX in the Euronext universe. There is still room for consolidation, especially in Central Europe. While we like Euronext's strategy, management and its very sound business, the valuation is quite stretched, and we see limited upside (actually 8% downside on the fundamentals). Furthermore, there are potentially negative elements down the road that need monitoring. For example, the announcement by Robinhood of the tokenization of American shares could become a direct threat to market venues. So far, this risk is limited in Europe, but the legal situation may evolve and catch up. Despite its strong fundamentals and the consolidation strategy, Euronext is too expensive for ourexpert's liking (PE of 22.6 in 2025 and 2026).
For daily updates, subscribe to our newsletter and for detailed information, reach out to us at sales@alphavalue.eu
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