Goldman Sachs’ Buy Case for Havas N.V. (AMS: HAVAS)
Company:Havas N.V. (AMS: HAVAS)
Analyst:Goldman Sachs Equity Research
Rating:Buy
P/E:7.7
Dividend Yield:5.26%
Price Target:€1.90 (31% Upside)
Why Goldman Sachs Rates Havas a Buy
Goldman Sachs initiated coverage on Havas N.V. (AMS: HAVAS) with a “buy” rating on January 15, 2025, setting a €1.90 price target, implying 31% upside from its €1.52 price (May 22, 2025). Their conviction stems from Havas’ undervaluation (P/E 7.7 vs. peers ~9.4x), robust 5.26% dividend yield, and strategic positioning in high-growth healthcare and digital advertising post its December 2024 Vivendi spin-off.
Valuation Analysis
Goldman Sachs’ DCF model projects €1.90, using a 2% organic revenue growth rate (2025–2028), 12.5% EBIT margin (up from 11.8% in 2024), and 8% discount rate (WACC). This reflects Havas’ €209M free cash flow (2024) and conservative debt profile (0.17 debt-to-equity).
Why It Matters: The €1.90 target offers a 25% margin of safety, protecting against market volatility.
Havas’ P/E of 7.7 (€1.52 ÷ €0.197 EPS, €283M net income ÷ 1.44B shares) is ~18% below peers (WPP, Omnicom, Publicis, Interpublic, Dentsu). Its EV/EBITDA (3.68) and P/B (0.78) further underscore undervaluation vs. Publicis (6.5, 1.5) and Omnicom (7.2, 1.3).
Goldman Sachs’ Take: Havas trades at a discount unwarranted by its cash flow stability and growth outlook.
Strategic Drivers
Havas Health and digital advertising (40% of 2024 revenue) drive >2% organic growth, with acquisitions adding €40–50M annually. Goldman Sachs projects 14–15% EBIT margins by 2028, fueled by healthcare demand and AI-driven ad tech.
Why It Matters: High-margin segments ensure sustainable earnings growth.
A proposed 10% share buyback (144M shares, ~€219M at €1.52) enhances EPS and signals management confidence. Goldman Sachs views this as a catalyst for value creation, complementing the 5.26% dividend yield (€0.08/share).
Goldman Sachs’ Take: Capital allocation prioritizes shareholder returns.
Risk Analysis
Volatility: Post-spin-off price swings (€1.40–€1.99) reflect market uncertainty. Mitigation: Havas’ €234M cash and 0.17 debt-to-equity provide stability.
Governance: Bolloré’s 31% stake and ‘stichting’ structure may deter some investors. Mitigation: Transparent reporting and buyback align interests.
Industry: Digital disruption and economic sensitivity challenge ad spending. Mitigation: Havas’ healthcare focus and diversified client base reduce exposure.
Goldman Sachs’ Take: Risks are manageable, with Havas’ fundamentals supporting long-term upside.
Goldman Sachs’ Conclusion
Havas N.V. (AMS: HAVAS) at €1.52 is a compelling value play, with a P/E of 7.7, 5.26% dividend yield, and €1.90 target (31% upside). Goldman Sachs’ “buy” rating reflects Havas’ discounted valuation, healthcare and digital growth, and disciplined capital allocation. While volatility and governance warrant monitoring, its robust cash flows and strategic focus make it a top pick for value investors.
This is not financial advice. Do your own research. Sources: Goldman Sachs, Boursorama, Yahoo Finance, Bloomberg.
