MERSEN (MRN) AI Stock Analysis

• Market Cap: €523.86M
• Dividend Yield: 4.19%
• Average Volume (3M): 44.28K
• Price to Earnings (P/E): 8.9
• Beta (1Y): 1.42
• Revenue Growth: 2.70%
• EPS Growth: -30.94%
• Country: FR
• Employees: 7,066
• Sector: Industrials
• Sector Strength: 91
• Industry: Electrical Equipment & Parts
• EPS (TTM): 2.43
• Shares Outstanding: 24,418,312
• 10 Day Avg. Volume: 43,694
• 30 Day Avg. Volume: 44,276
• PEG Ratio: -32.86
• Price to Book (P/B): 1.29
• Price to Sales (P/S): 0.00
• P/FCF Ratio: 12.25
• 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: €25.38
• Price Target Upside: 18.05% Upside
• Rating Consensus: Hold
• Number of Analyst Covering: 4

• Rating: 72 Outperform
• Price Target: €23.00 ▲(6.98%Upside)

Mersen's stock score is driven by a solid financial foundation with strong revenue growth but faces challenges in profitability and cash flow management. Technical indicators support stability, while attractive valuation metrics like a low P/E and high dividend yield enhance its appeal. However, attention is needed on declining ROE and liquidity constraints.

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 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 through the sale and distribution of its specialized products and solutions in the Advanced Materials and Electrical Power sectors. The company's key revenue streams include the production and sale of electrical protection components, graphite-based materials, and thermal management solutions. MERSEN has established long-term partnerships with industry leaders which enhance its market presence and contribute to consistent revenue flow. The company also invests in innovation and research to maintain a competitive edge, ensuring its solutions meet evolving market demands and drive further sales.

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: 21.50
• 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:MRN, the sentiment is Positive. The current price of 21.5 is above the 20-day moving average (MA) of 20.68, above the 50-day MA of 20.14, and above the 200-day MA of 20.20, indicating a bullish trend. The MACD of 0.53 indicates Negative momentum. The RSI at 59.41 is Neutral, neither overbought nor oversold. The STOCH value of 46.85 is Neutral, 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
MRN	72 Outperform	€523.86M	8.86	7.20%	4.19%	2.70%	-30.94%
Sector *	65 Neutral	$10.85B	15.47	5.22%	1.89%	3.09%	-26.84%
0NA0		€302.00M	10.74	6.23%	2.58%	―	―
0IN3		€490.39M	78.27	0.93%	0.88%	―	―
0MW7		€29.66B	25.10	16.23%	1.94%	―	―
0IGF		€4.84B	17.32	15.96%	2.35%	―	―
0HDQ		€829.83M	12.57	9.18%	1.46%	―	―

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.