Investing.com – The stock of Societe Generale SA (EPA:), one of the three banks of the the dissolution of the National Assembly and the organization of new legislative elections.
As a bank, an inherently cyclical activity, Société Générale is more exposed than others to political and systemic risks.
Moreover, the other CAC 40 banks also fell sharply, with BNP Paribas SA (EPA:) which lost 4.5% and Crédit Agricole SA (EPA:) 3.5%.
Vinci (EPA:) is also under pressure, the renationalization of motorway concessionaires having appeared in the 2022 program of the RN, its action falling by 4.5%.
Faced with such falls, the question arises whether the market reaction is excessive, and whether the fall should not be seized as an opportunity.
In the case of Société Générale, it will be recalled that this Monday’s plunge comes on top of several days of decline. Between the June 3 peak at 27.72 euros and today’s low at 23.93 euros, the stock lost a total of 13.6%.
Thus, the stock now displays an upside potential of 25.8% according to analysts, who have an average target of 30.26 euros for the stock.
The InvestingPro Fair Value, which synthesizes several recognized valuation models, is even more optimistic, appearing at 31.10 euros, or more than 29% above the current price.
However, it is probably still too early to take a position. Indeed, the French political landscape is about to radically change, and there is a good chance according to polls that the National Rally will obtain a significant share of seats.
Thus, the French market is perhaps not the best option for the coming months, and it could therefore be interesting to turn to American stocks, while politics there are more favorable to the markets, Trump being the favorite in the polls for this year’s presidential election.
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