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

• Previous Close: CHF37.92
• Sector Valuation Confidence Level: Moderate

Valuation method	Value, CHF	Upside, %
Artificial intelligence (AI)	n/a	n/a
Intrinsic value (DCF)		n/a
Graham-Dodd Method		n/a
Graham Formula	24.20	-36

Strategic Investment Analysis

Company Overview

Bouygues SA is a diversified French conglomerate operating in construction, telecom, and media sectors, with a strong presence in France and internationally. Founded in 1952 and headquartered in Paris, the company is structured into three main divisions: Bouygues Construction (engineering and infrastructure), Bouygues Telecom (telecommunications), and TF1 Group (media and entertainment). Bouygues Construction is a leader in building, civil works, and energy services, while Bouygues Telecom competes in France's mobile and broadband markets. TF1 Group operates major TV channels like TF1 and TMC, alongside content production and digital media. Bouygues SA's diversified business model provides resilience against sector-specific downturns, leveraging synergies between its divisions. With a market cap of €14.2 billion, the company plays a critical role in France's infrastructure development and digital transformation. Its integrated approach—combining construction, telecom, and media—positions it uniquely in Europe's industrial and services landscape.

Investment Summary

Bouygues SA presents a mixed investment case. Its diversified operations reduce reliance on any single sector, providing stability, but also expose it to varying cyclical risks. The construction division benefits from France's infrastructure spending, while Bouygues Telecom faces intense competition from Orange and Iliad. TF1 Group struggles with declining linear TV viewership but is pivoting to digital. Financially, Bouygues generated €56.8B in revenue (FY 2024) with €1.06B net income, but its high debt (€14.7B) and moderate beta (0.87) suggest moderate risk. The dividend yield (~2.6%) is attractive, but growth depends on successful telecom investments and construction margins. Investors should weigh its defensive diversification against sector-specific headwinds.

Competitive Analysis

Bouygues SA's competitive advantage lies in its vertical integration and diversification across construction, telecom, and media. In construction, it competes with Vinci and Eiffage in France, leveraging its scale in complex infrastructure projects. Bouygues Telecom, though smaller than Orange, differentiates with competitive pricing and network investments (e.g., 5G rollout). TF1 Group remains France's leading private broadcaster but faces digital disruption from streaming platforms. The company's synergies—such as cross-selling telecom services to construction clients—add value, but its conglomerate structure can dilute focus. Bouygues Construction's expertise in sustainable building (e.g., energy-efficient projects) aligns with EU green policies, while TF1's local content production is a strength against global streaming rivals. However, telecom margin pressures and construction sector volatility are key challenges. Bouygues' ability to balance these dynamics while managing debt will determine its long-term positioning.

Major Competitors

• Vinci SA (DG.PA): Vinci is Bouygues' primary rival in construction and concessions, with a larger global footprint (e.g., airports, toll roads). It outperforms Bouygues in profitability but lacks telecom/media diversification. Vinci's concessions business provides stable cash flows, whereas Bouygues relies more on cyclical construction projects.
• Orange SA (ORA.PA): Orange dominates France's telecom market with superior network coverage and higher ARPU. Bouygues Telecom competes on price but trails in fiber rollout. Orange's scale and international presence give it an edge, though Bouygues' convergence strategy (combining mobile, TV, and broadband) is a differentiator.
• Eiffage SA (EI.PA): Eiffage rivals Bouygues in construction and public works, with a focus on PPP projects. It has a stronger order book in transport infrastructure but lacks Bouygues' telecom and media segments, making it more exposed to construction cycles.
• Iliad SA (ILD.PA): Iliad (Free Mobile) disrupts France's telecom market with aggressive pricing, pressuring Bouygues Telecom's margins. Iliad's lean operations and digital-first approach contrast with Bouygues' traditional telecom model, though Bouygues benefits from its conglomerate backing.
• Lagardère SA (MMB.PA): Lagardère competes with TF1 Group in media (e.g., Hachette publishing, Europe 1 radio). It lacks Bouygues' TV dominance but has a stronger international publishing footprint. TF1's local content production is a key advantage over Lagardère's broader but less integrated media assets.