Thales : A long term support level to be taken advantage of

07/28/2020 | 03:47am EST

Jordan Dufee

long trade on a pullback Target price hit

Entry price : 62€ | Target : 69.2€ | Stop-loss : 58€ | Cancellation Level : 68€ | Potential : 11.61%

The decline over the past weeks has brought the price of Thales shares back to an important technical support level at 62 EUR. This represents an opportunity to take advantage of these prices levels. Investors should buy the stock at current prices near € 62 in order to target the € 69.2.

Strengths

• The current area is a good opportunity for investors interested in buying the stock in a mid or long-term perspective. Indeed, the share is moving closer to its lower bound at EUR 62 EUR in weekly data.
• Share prices are approaching a strong support area in daily data, which offers good timing for investors.
• As regards fundamentals, the enterprise value to sales ratio is at 1 for the current period. Therefore, the company is undervalued.
• For the last week, the earnings per share forecast has been revised upwards. According to recent estimates, analysts give a positive overview of the stock
• The difference between current prices and the average target price is rather important and implies a significant appreciation potential for the stock.

Weaknesses

• Revenue estimates are regularly revised downwards for the current and coming years.
• For the last twelve months, sales expectations have been significantly downgraded, which means that less important sales volumes are expected for the current fiscal year over the previous period.
• For the last few months, analysts have been revising downwards their earnings forecast.
• For the last 12 months, analysts have been regularly downgrading their EPS expectations. Analysts predict worse results for the company against their predictions a year ago.
• Below the resistance at 82.6 EUR, the stock shows a negative configuration when looking looking at the weekly chart.

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