MERSEN (MRN) AI Stock Analysis

• Market Cap: €522.64M
• Dividend Yield: 4.37%
• Average Volume (3M): 39.22K
• Price to Earnings (P/E): 10.5
• Beta (1Y): 1.19
• Revenue Growth: 0.23%
• EPS Growth: -35.65%
• Country: FR
• Employees: 7,066
• Sector: Basic Materials
• Sector Strength: 58
• Industry: Electrical Equipment & Parts
• EPS (TTM): 1.21
• Shares Outstanding: 24,418,312
• 10 Day Avg. Volume: 45,390
• 30 Day Avg. Volume: 39,223
• PEG Ratio: -0.28
• Price to Book (P/B): 0.59
• Price to Sales (P/S): 0.40
• P/FCF Ratio: -22.15
• 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: €28.00
• Price Target Upside: 35.92% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 2
• EPS Forecast (FY): N/A
• Revenue Forecast (FY): N/A

• Rating: 63 Neutral
• Price Target: €22.00 ▲(6.80% Upside)

Mersen's stock score reflects a mix of strong valuation and financial performance, offset by bearish technical indicators. The company's attractive P/E ratio and dividend yield are significant positives, but declining profitability metrics and negative cash flow pose risks. Technical analysis indicates potential for further downside, although oversold conditions could attract buyers.

Positive Factors

Revenue Growth

Consistent revenue growth indicates strong market demand and effective business strategies, enhancing long-term sustainability and competitiveness.

Stable Balance Sheet

A stable balance sheet with moderate leverage provides financial flexibility and reduces risk, supporting long-term operational stability.

Cash Generation

Strong operating cash flow indicates effective cash management and the ability to fund operations and investments, supporting growth initiatives.

Negative Factors

Profitability Pressure

Declining net profit margins suggest challenges in cost management and revenue conversion, potentially impacting long-term profitability.

Declining ROE

A declining ROE indicates reduced efficiency in generating profits from shareholder investments, which may affect investor confidence and capital efficiency.

Negative Free Cash Flow

Negative free cash flow due to high capital expenditures raises concerns about liquidity and the ability to fund future strategic initiatives without external financing.

MERSEN Business Overview & Revenue Model

Company Description

Mersen SA manufactures and sells electrical power products and advanced materials in France, North America, rest of Europe, the Asia-Pacific, and internationally. It operates through Advanced Materials and Electrical Power segments. The company offers electrical protection and control products, such as IEC and UL/CSA low voltage general purpose fuses and fuse gears, high and medium voltage fuses, and power transfer solutions for rail vehicles, as well as surge protection, lightning protection, and power monitoring solutions; and power management solutions, including high speed fuses, DC protection for electric vehicles and battery, cooling solutions, bus bars, and aluminum electrolytic and film capacitors. It also provides anticorrosion equipment comprising heat exchangers; columns, reactors, and pressure vessels; PTFE or PFA bellows, pipes, elbows, and fittings; graphite bursting discs; corrosion resistant materials; and after-sales and maintenance services, as well as graphite specialties, such as isostatic graphite, carbon insulation, extruded graphite, carbon/carbon composites, silicon carbide, and flexible graphite. In addition, the company offers carbon brushes, brush-holders, brush-rockers and brush gear housings, signal and power transmission systems, rotary joints, current collectors, wheel flange lubrication solutions, carbon dust collection systems, and monitoring solutions, as well as slip, pitch control, and electrical ring assemblies. It serves energy, electronics, transportation, corrosive chemicals, and process industries, as well as other markets comprising building, elevator, ski lifts, defense, HVAC, and outdoor LED lighting markets. The company was formerly known as Groupe Carbone Lorraine SA and changed its name to Mersen SA in 2010. Mersen SA was founded in 1889 and is headquartered in Courbevoie, France.

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 shows strong revenue growth and a stable balance sheet, but faces challenges with declining net profit margin and return on equity. The negative free cash flow due to high capital expenditures is a concern, though it could lead to long-term benefits.

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	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	1.23B	1.24B	1.21B	1.11B	922.80M	847.20M
Gross Profit	364.40M	385.80M	385.40M	348.00M	289.80M	251.60M
EBITDA	183.50M	179.80M	191.40M	171.10M	141.50M	69.00M
Net Income	49.40M	59.00M	81.60M	67.70M	54.40M	-12.00M
Balance Sheet
Total Assets	1.83B	1.80B	1.54B	1.44B	1.29B	1.20B
Cash, Cash Equivalents and Short-Term Investments	161.60M	71.10M	64.50M	97.70M	83.50M	136.70M
Total Debt	609.20M	477.50M	330.80M	393.80M	329.20M	363.50M
Total Liabilities	1.01B	919.00M	717.80M	745.40M	660.30M	662.00M
Stockholders Equity	792.20M	850.20M	788.20M	661.30M	602.30M	509.20M
Cash Flow
Free Cash Flow	32.80M	-22.60M	-8.00M	8.20M	24.10M	69.10M
Operating Cash Flow	218.20M	194.00M	179.30M	105.50M	116.80M	132.70M
Investing Cash Flow	-265.00M	-279.90M	-183.70M	-96.30M	-93.90M	-74.40M
Financing Cash Flow	130.00M	96.70M	-17.10M	11.90M	-78.20M	4.70M

MERSEN Technical Analysis

• Technical Analysis Sentiment: Negative
• Last Price: 20.60
• 50DMA: Negative
• 100DMA: Negative
• 200DMA: Negative
• MACD: Positive
• RSI: Positive
• STOCH: Positive

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For FR:MRN, the sentiment is Negative. The current price of 20.6 is below the 20-day moving average (MA) of 23.93, below the 50-day MA of 24.36, and below the 200-day MA of 21.57, indicating a bearish trend. The MACD of -1.19 indicates Positive momentum. The RSI at 28.00 is Positive, neither overbought nor oversold. The STOCH value of 6.08 is Positive, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for FR:MRN.

MERSEN Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
SDG	74 Outperform	€796.25M	12.55	8.63%	1.51%	1.91%	-4.82%
NEX	73 Outperform	€5.26B	11.00	25.83%	2.18%	12.65%	81.77%
EXE	63 Neutral	€240.92M	8.62	6.23%	3.36%	-4.89%	-35.10%
MRN	63 Neutral	€522.64M	10.54	6.15%	4.37%	0.23%	-35.65%
LR	63 Neutral	€38.61B	31.80	17.50%	1.69%	12.62%	17.18%
Sector *	61 Neutral	$10.43B	7.12	-0.05%	2.87%	2.86%	-36.73%
JCQ	54 Neutral	€376.82M	41.12	1.38%	1.14%	-7.44%	85.42%