MERCIALYS (MERY) AI Stock Analysis

• Market Cap: €1.09B
• Dividend Yield: 9.24%
• Average Volume (3M): 155.41K
• Price to Earnings (P/E): 30.5
• Beta (1Y): 0.41
• Revenue Growth: -1.19%
• EPS Growth: -46.75%
• Country: FR
• Employees: 174
• Sector: Real Estate
• Sector Strength: 53
• Industry: REIT - Retail
• EPS (TTM): 0.21
• Shares Outstanding: 93,886,500
• 10 Day Avg. Volume: 166,244
• 30 Day Avg. Volume: 155,409
• PEG Ratio: -0.80
• Price to Book (P/B): 1.74
• Price to Sales (P/S): 4.38
• P/FCF Ratio: 49.28
• Enterprise Value/Market Cap: N/A
• Enterprise Value/Revenue: N/A
• Enterprise Value/Gross Profit: N/A
• Enterprise Value/Ebitda: N/A
• 1Y Price Target: €12.80
• Price Target Upside: 8.84% Upside
• Rating Consensus: Hold
• Number of Analyst Covering: 2
• EPS Forecast (FY): 1.21
• Revenue Forecast (FY): €192.69M

• Rating: 52 Neutral
• Price Target: €12.00 ▲(2.04% Upside)
• Action: Reiterated Date: 03/04/26
• Date: Action: Reiterated 03/04/26

The score is held back primarily by weaker cash generation and higher leverage in 2025, which increase financial risk and reduce flexibility. Technicals are supportive but appear overextended, while valuation is balanced between a high dividend yield and a relatively high P/E.

Positive Factors

High EBITDA margin

Sustained high EBITDA margins (~55%) indicate efficient property-level operations and pricing power in the portfolio. For a retail REIT this margin cushion supports stability of operating cash flow through cycles, underpinning the ability to fund maintenance, targeted capex and tenant services over months.

Recent revenue rebound

A clear revenue rebound reflects improving leasing dynamics and tenant demand, which is structurally important for rental income stability. Recovering top-line trends strengthen occupancy and rental reversion potential, supporting recurring cash flows and underwriting for renovation or selective development projects over the medium term.

Retail-focused rental income model

A business model centered on diversified rental income from necessity and destination retail (grocery, services) delivers durable cashflow characteristics. Long-term leases and retail anchor tenants drive predictable receipts and allow strategic asset upgrades and retailer partnerships to sustain footfall and income over multiple quarters.

Negative Factors

Rising leverage

Material increase in leverage reduces financial flexibility for a rate-sensitive REIT. Higher debt-to-equity heightens refinancing and interest-rate risk, limiting capacity for opportunistic acquisitions or rapid deleveraging and constraining strategic choices if market funding conditions tighten over the next several quarters.

Weak free cash flow and cash conversion

A steep FCF decline and low cash conversion meaningfully reduce internal funding for dividends, capex and debt paydown. Reliance on external financing or asset disposals increases, and the firm has less buffer to sustain distributions or invest in value-enhancing refurbishments without increasing leverage or cutting payouts.

Earnings softness / EPS decline

A sharp EPS contraction signals pressure on profitability drivers—rent growth, occupancy or non-recurring items—that may persist. Deteriorating earnings limit retained earnings accumulation, weaken coverage metrics and could necessitate strategic trade-offs between dividend policy, reinvestment and balance-sheet repair over the medium term.

MERCIALYS Business Overview & Revenue Model

Company Description

Mercialys is one of France's leading real estate companies, focused exclusively on shopping centers and high-street retail assets. At June 30, 2020, Mercialys had a portfolio of 2,111 leases, representing a rental value of Euro 182.3 million on an annualized basis. At June 30, 2020, it owned properties with an estimated value of Euro 3.5 billion (including transfer taxes). Mercialys has had SIIC real estate investment trust (REIT) tax status since November 1, 2005 and has been listed on Euronext Paris Compartment A (ticker: MERY) since its initial public offering on October 12, 2005. At June 30, 2020, there were 92,049,169 shares outstanding.

How the Company Makes Money

MERCIALYS generates revenue primarily through rental income from its extensive portfolio of retail properties. The company leases space to various retail tenants, including grocery stores, fashion outlets, and service providers, which provides a steady stream of income. Additionally, MERCIALYS may earn revenue from service fees related to property management and maintenance. The company also engages in strategic partnerships with retailers to enhance consumer experiences and drive foot traffic to its centers, further solidifying its revenue base. Significant contributions to earnings may come from property development projects and value-enhancing renovations that increase the overall value and appeal of its real estate assets.

MERCIALYS Financial Statement Overview

Summary

Financials are mixed and risk-tilted: revenue rebounded in 2025 and profitability remains solid, but earnings softened versus 2023–2024. Balance-sheet risk increased with higher leverage (debt-to-equity ~2.94), and cash generation weakened sharply with free cash flow down ~83% and low cash conversion (~17% of net income), reducing flexibility for dividends and deleveraging.

Income Statement

Revenue has rebounded recently (up 8.4% in 2025 after a modest 2024), but growth has been uneven over the cycle. Profitability is still solid for a retail REIT, with 2025 net margin at ~14% and strong EBITDA margin (~55%), yet earnings power has clearly softened versus 2023–2024 as margins and net income declined in 2025.

Balance Sheet

Leverage has increased meaningfully, with debt-to-equity rising to ~2.94 in 2025 from ~2.07 in 2024, which reduces financial flexibility in a rate-sensitive REIT model. Returns on equity are positive but modest (~5.7% in 2025) and have trended down versus prior years, suggesting higher balance-sheet risk without commensurate return improvement.

Cash Flow

Cash generation weakened materially in 2025: operating cash flow fell to ~€123M from ~€162M in 2024, while free cash flow dropped sharply to ~€21M (down ~83%). Free cash flow covers only a small portion of net income in 2025 (~17%), indicating reduced cash conversion and potentially tighter capacity for dividends, debt reduction, or reinvestment compared with prior years when free cash flow tracked earnings much more closely.

Breakdown	Dec 2025	Dec 2024	Dec 2023	Dec 2022	Dec 2021
Income Statement
Total Revenue	236.59M	221.16M	178.01M	176.89M	205.35M
Gross Profit	108.21M	172.31M	170.92M	165.93M	160.04M
EBITDA	130.35M	130.13M	147.76M	141.56M	149.74M
Net Income	33.97M	53.76M	53.37M	43.09M	62.18M
Balance Sheet
Total Assets	2.43B	2.16B	2.15B	2.29B	2.43B
Cash, Cash Equivalents and Short-Term Investments	435.32M	283.65M	118.16M	216.09M	257.18M
Total Debt	1.75B	1.30B	1.20B	1.27B	1.40B
Total Liabilities	1.77B	1.40B	1.28B	1.36B	1.49B
Stockholders Equity	595.09M	631.07M	677.22M	725.13M	743.12M
Cash Flow
Free Cash Flow	21.03M	161.53M	134.27M	147.68M	127.48M
Operating Cash Flow	122.78M	161.53M	134.27M	150.12M	135.74M
Investing Cash Flow	-127.03M	102.22M	-21.74M	59.00M	14.72M
Financing Cash Flow	155.92M	-98.26M	-210.37M	-250.20M	-358.00M

MERCIALYS Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 11.76
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Positive
• MACD: Negative
• RSI: Neutral
• STOCH: Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For FR:MERY, the sentiment is Positive. The current price of 11.76 is above the 20-day moving average (MA) of 11.55, above the 50-day MA of 11.05, and above the 200-day MA of 10.91, indicating a bullish trend. The MACD of 0.32 indicates Negative momentum. The RSI at 58.13 is Neutral, neither overbought nor oversold. The STOCH value of 45.07 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for FR:MERY.

MERCIALYS Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
LI	75 Outperform	€9.79B	7.44	14.13%	5.04%	6.74%	74.00%
CARM	71 Outperform	€2.46B	12.87	―	7.42%	16.69%	574.43%
COVH	68 Neutral	€3.57B	10.97	6.03%	6.49%	21.24%	241.67%
PAT	68 Neutral	€385.33M	8.79	―	5.92%	15.61%	17.82%
Sector *	65 Neutral	$2.17B	12.19	3.79%	4.94%	3.15%	1.96%
FREY	65 Neutral	€1.01B	18.91	0.61%	6.51%	8.81%	-78.28%
MERY	52 Neutral	€1.09B	30.52	5.24%	9.24%	-1.19%	-46.75%