MERSEN (MRN) AI Stock Analysis

• Market Cap: €616.45M
• Dividend Yield: 3.65%
• Average Volume (3M): 50.32K
• Price to Earnings (P/E): 12.4
• Beta (1Y): 1.27
• Revenue Growth: 0.23%
• EPS Growth: -35.65%
• Country: FR
• Employees: 7,066
• Sector: Basic Materials
• Sector Strength: 60
• Industry: Electrical Equipment & Parts
• EPS (TTM): 1.21
• Shares Outstanding: 24,418,312
• 10 Day Avg. Volume: 75,925
• 30 Day Avg. Volume: 50,321
• PEG Ratio: N/A
• Price to Book (P/B): 0.00
• Price to Sales (P/S): 0.00
• P/FCF Ratio: 0.00
• 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: €24.50
• Price Target Upside: -2.39% Downside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 3

• Rating: 76 Outperform
• Price Target: €27.00 ▲(7.57% Upside)

Mersen's overall stock score is driven by strong technical momentum and an attractive valuation, despite some challenges in financial performance. The stock's bullish trend and undervaluation are key strengths, while profitability pressures and cash flow concerns are areas to monitor.

Positive Factors

Financial Performance

Despite the weakness of its markets, Mersen should be able to report EBITDA of €200m, a new record.

Market Opportunities

Some major markets, such as aerospace and rail, continue to be buoyant, and the US industrial markets are enjoying favourable momentum.

Valuation

Mersen, which is still trading on the lowest valuation multiples in its history, still represents a clear Buy opportunity.

Negative Factors

Profit Decline

The producer of graphite specialities and industrial fuses has reported a 28% fall in net profit due to the downturn in certain key markets and major restructuring charges.

Sales Forecast

The Group is cautious about the outlook, forecasting a probable decline in organic sales and a slight contraction in operating margin.

MERSEN Business Overview & Revenue Model

Company Description

MERSEN (MRN) is a global expert in electrical specialty solutions, serving a variety of industries including energy, transportation, and industrial applications. The company specializes in manufacturing advanced materials, electrical protection and control components, and thermal management solutions. MERSEN's core products include fuses, bus bars, heat sinks, and graphite solutions, which are crucial for enhancing efficiency and safety in electrical systems and processes.

How the Company Makes Money

MERSEN generates revenue primarily through the sale of its electrical components and materials. The company operates through several key segments, including Electrical Protection, Advanced Materials, and Thermal Management. Each segment contributes to its revenue through the sale of specialized products tailored to various industrial applications. MERSEN also engages in long-term partnerships with major players in the aerospace, automotive, and energy sectors, providing consistent revenue streams. Additionally, the company invests in research and development to innovate its product offerings, which helps capture new market opportunities and maintain competitive pricing. Overall, MERSEN's diversified product range and strategic partnerships are significant factors in driving its earnings.

MERSEN Financial Statement Overview

Summary

Mersen has strong revenue growth and a stable balance sheet, though profitability metrics reflect pressure. Strategic investments strain cash flow, with negative free cash flow and declining return on equity, warranting attention.

Income Statement

Mersen has demonstrated solid revenue growth over the years, with a noticeable increase from 847 million EUR in 2020 to 1.24 billion EUR in 2024. However, the gross profit margin has remained relatively stable, indicating consistent cost management. The EBIT and EBITDA margins for 2024 are robust at 8.64% and 14.19% respectively, though slightly lower than the previous year, suggesting slight pressure on operational efficiency. Net profit margin decreased from 6.74% in 2023 to 4.74% in 2024, which is a concern and indicates challenges in converting revenue into profit.

Balance Sheet

The debt-to-equity ratio for 2024 is approximately 0.56, showing moderate leverage and manageable debt levels. The return on equity (ROE) has declined to 6.94% in 2024 from 10.35% in 2023, which might indicate reduced profitability on shareholder investments. The equity ratio has improved over the years, reaching 47.19% in 2024, suggesting a strong equity base relative to total assets. Overall, the balance sheet reflects a stable financial position but with potential risks related to declining ROE.

Cash Flow

Mersen's operating cash flow has been positive and growing, reaching 194 million EUR in 2024, which is a positive indicator of cash generation capability. However, the free cash flow has been negative in recent years, driven by significant capital expenditures, raising concerns about cash availability for other strategic initiatives. The free cash flow to net income ratio is negative, indicating that the company is investing heavily in capital expenditures, which might affect liquidity.

Breakdown	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	1.24B	1.21B	1.11B	922.80M	847.20M
Gross Profit	385.80M	385.40M	348.00M	289.80M	251.60M
EBITDA	179.80M	191.40M	171.10M	141.50M	69.00M
Net Income	59.00M	81.60M	67.70M	54.40M	-12.00M
Balance Sheet
Total Assets	1.80B	1.54B	1.44B	1.29B	1.20B
Cash, Cash Equivalents and Short-Term Investments	71.10M	64.50M	97.70M	83.50M	136.70M
Total Debt	477.50M	323.80M	393.80M	329.20M	363.50M
Total Liabilities	919.00M	717.80M	745.40M	660.30M	662.00M
Stockholders Equity	850.20M	788.20M	661.30M	602.30M	509.20M
Cash Flow
Free Cash Flow	-22.60M	-8.00M	2.00M	24.10M	69.10M
Operating Cash Flow	194.00M	179.30M	105.50M	116.80M	132.70M
Investing Cash Flow	-279.90M	-183.70M	-96.30M	-93.90M	-74.40M
Financing Cash Flow	96.70M	-17.10M	11.90M	-78.20M	4.70M

MERSEN Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 25.10
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Positive
• MACD: Negative
• RSI: Negative
• STOCH: Negative

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For FR:MRN, the sentiment is Positive. The current price of 25.1 is above the 20-day moving average (MA) of 23.28, above the 50-day MA of 21.60, and above the 200-day MA of 20.03, indicating a bullish trend. The MACD of 1.15 indicates Negative momentum. The RSI at 70.64 is Negative, neither overbought nor oversold. The STOCH value of 84.88 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for FR:MRN.

MERSEN Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
NEX	77 Outperform	€6.01B	12.55	25.83%	1.94%	12.65%	81.77%
MRN	76 Outperform	€616.45M	12.43	6.15%	3.65%	0.23%	-35.65%
LR	73 Outperform	€34.36B	28.30	17.67%	1.69%	10.57%	13.41%
EXE	65 Neutral	€257.21M	9.21	6.23%	2.96%	-4.89%	―
SDG	65 Neutral	€796.25M	12.16	9.18%	1.52%	2.46%	-14.59%
Sector *	57 Neutral	€6.92B	6.15	3.91%	3.65%	28.24%	-62.06%
JCQ	55 Neutral	€447.37M	71.87	0.93%	0.96%	-11.69%	-87.46%

MERSEN Corporate Events

Mersen Appoints Salvador Lamas as New COO Amid Succession Planning

Mersen has appointed Salvador Lamas as Chief Operating Officer, effective immediately. Lamas, with 30 years of experience in industrial groups, has been instrumental in advancing Mersen’s Electrical Power business unit since joining in 2021. His new role will focus on coordinating operational activities and enhancing profitability, contributing to the company’s growth in traditional and emerging markets. This appointment is part of a succession plan for CEO Luc Themelin, with an external search for candidates underway to decide on the succession in the latter half of 2025.