Stock Analysis & Valuation Altarea SCA (ALTA.PA)

• Previous Close: €116.20
• Sector Valuation Confidence Level: Low

Valuation method	Value, €	Upside, %
Artificial intelligence (AI)	135.68	17
Intrinsic value (DCF)	55.44	-52
Graham-Dodd Method		n/a
Graham Formula	2.27	-98

Strategic Investment Analysis

Company Overview

Altarea SCA is a leading French real estate developer and investor, specializing in mixed-use urban renewal projects across Retail, Housing, and Business real estate. Listed on Euronext Paris and part of the SBF 120 index, Altarea leverages its integrated expertise to design, develop, market, and manage tailored real estate solutions. The company plays a pivotal role in France's urban transformation, combining development and investment activities to create sustainable, high-value properties. With a diversified portfolio and strong market presence, Altarea is well-positioned to capitalize on France's growing demand for mixed-use developments. Its strategic focus on urban renewal aligns with broader trends toward sustainable and integrated city planning, reinforcing its leadership in the French real estate sector.

Investment Summary

Altarea presents a compelling investment case due to its leadership in France's mixed-use urban renewal projects and diversified real estate portfolio. However, risks include high total debt (€2.74B) relative to its market cap (€2.24B) and a low net income margin (€6.1M on €2.71B revenue). The company's operating cash flow (€432.3M) and solid dividend (€16 per share) provide some stability, but its beta of 1.039 suggests market-correlated volatility. Investors should weigh its urban development expertise against macroeconomic risks in European real estate, including interest rate sensitivity and regulatory pressures.

Competitive Analysis

Altarea's competitive advantage lies in its integrated model combining development and investment across Retail, Housing, and Business real estate, enabling it to lead large-scale urban renewal projects. Its expertise in mixed-use developments differentiates it from single-sector peers, offering synergies in planning, financing, and tenant diversification. However, its high debt load (€2.74B) could limit agility compared to less leveraged competitors. The company's focus on France provides deep local market knowledge but exposes it to regional economic fluctuations. While its SBF 120 listing and Euronext Paris presence enhance visibility, Altarea faces stiff competition from larger pan-European REITs with broader geographic diversification. Its ability to secure prime urban projects is a strength, but execution risks in complex developments remain a challenge.

Major Competitors

• Gecina (GFC.PA): Gecina specializes in office and residential real estate in Paris, with a strong balance sheet and lower leverage than Altarea. Its focus on prime Parisian assets provides stability but lacks Altarea's mixed-use development capabilities. Gecina's weakness is limited exposure to retail and urban renewal projects.
• Unibail-Rodamco-Westfield (URW.AS): A pan-European retail giant, URW dominates large shopping centers but struggles with post-pandemic retail headwinds. Its scale surpasses Altarea's retail portfolio, but it lacks Altarea's housing and mixed-use expertise. High debt and reliance on foot traffic are key vulnerabilities.
• Icade (ICAD.PA): Icade shares Altarea's mixed-use focus but emphasizes healthcare and office properties. Its weaker development pipeline in retail and housing limits direct competition. Icade's partnership model is asset-light but reduces control compared to Altarea's integrated approach.
• BNP Paribas Real Estate (BNP.PA): A subsidiary of BNP Paribas, this firm competes in development and investment management. Its banking affiliation provides financing advantages but lacks Altarea's standalone development track record. Primarily a service provider rather than a direct competitor in asset ownership.