Stock Analysis & Valuation Bouygues S.A. (EN.PA)

• Previous Close: €45.61
• Sector Valuation Confidence Level: Moderate

Valuation method	Value, €	Upside, %
Artificial intelligence (AI)	28.02	-39
Intrinsic value (DCF)	23.49	-48
Graham-Dodd Method		n/a
Graham Formula	25.98	-43

Strategic Investment Analysis

Company Overview

Bouygues SA (EN.PA) is a diversified French conglomerate operating in construction, telecom, and media sectors. Headquartered in Paris, the company is a key player in infrastructure development, offering services from urban planning to industrial projects, road construction, and rail network maintenance. Bouygues also holds a strong presence in media through its TF1 Group, producing and broadcasting popular TV channels like TF1, TMC, and LCI. Additionally, its telecom arm, Bouygues Telecom, provides mobile and fixed Internet services, including the Bbox Miami Android TV box. With operations spanning France and international markets, Bouygues leverages its integrated business model to drive growth across multiple industries. The company’s diversified revenue streams and strong market positioning in construction and media make it a significant player in the European industrials and telecom sectors.

Investment Summary

Bouygues SA presents a mixed investment case with strengths in diversification across construction, telecom, and media. The company benefits from stable infrastructure demand in France and Europe, supported by government spending on transportation and urban development. However, its telecom segment faces intense competition from larger players like Orange and Iliad, pressuring margins. The media division, while profitable, is exposed to advertising cyclicality. Bouygues’ financials show moderate leverage (€14.7B debt vs. €5.6B cash) and a reasonable dividend yield (~2.8%). Investors should weigh its stable construction backlog against telecom sector risks and media industry disruption. The stock’s low beta (0.83) suggests relative stability, but growth may be constrained by sector saturation.

Competitive Analysis

Bouygues SA operates in highly competitive industries, each with distinct dynamics. In construction, it competes with Vinci and Eiffage in France, where scale and government contracts are critical. Bouygues’ integrated model (materials, engineering, and maintenance) provides cost synergies, but Vinci’s larger international footprint gives it an edge in global infrastructure projects. In telecom, Bouygues Telecom is the third-largest French operator, trailing Orange and Iliad. While its network quality is competitive, pricing pressure and 5G investment demands limit profitability. The media division (TF1 Group) dominates French TV advertising but faces digital disruption from streaming platforms. Bouygues’ conglomerate structure offers diversification benefits but may lack the focus of pure-play competitors. Its competitive advantage lies in cross-sector synergies—e.g., infrastructure projects supporting telecom network rollout—but this also exposes it to sector-specific downturns.

Major Competitors

• Vinci SA (DG.PA): Vinci is Bouygues’ primary rival in construction, with a larger global footprint (notably in concessions and energy). It outperforms in international infrastructure projects but has less exposure to media and telecom. Vinci’s stronger balance sheet (lower net debt) and higher margins in construction make it a more conservative pick, though Bouygues’ diversification offers upside in a booming media or telecom market.
• Eiffage SA (FGR.PA): Eiffage competes closely with Bouygues in French construction and public works, with a focus on sustainable infrastructure. It lacks Bouygues’ media/telecom diversification, making it more cyclical. Eiffage’s concessions business (toll roads) provides steady cash flow, but its smaller scale limits international opportunities compared to Bouygues or Vinci.
• Orange SA (ORA.PA): Orange dominates Bouygues Telecom in mobile and broadband with superior network coverage and brand loyalty. Its larger scale allows for higher 5G investment, but Bouygues’ leaner operations sometimes undercut Orange on price. Orange’s African growth markets provide diversification, whereas Bouygues is more France-centric.
• Iliad SA (ILD.PA): Iliad (Free Mobile) is a disruptive force in French telecom, known for aggressive pricing. It pressures Bouygues’ margins but lacks Bouygues’ infrastructure backing or media assets. Iliad’s expansion into Italy adds growth potential, but its thinner profitability compared to Bouygues Telecom reflects its discount positioning.
• TF1 Group (TFI.PA): TF1 Group (now part of Bouygues) leads French TV advertising but competes with M6 (RTL Group) and streaming platforms. Its content production and channels (TF1, LCI) are strengths, but digital transition risks persist. Bouygues’ ownership provides financial stability, but pure-play media rivals may adapt faster to industry shifts.