Sell Havas

May 22, 2025

ANXTAM: HAVAS

Share Price: €1.55

Market Cap: €1.6 billion

Enterprise Value: €1.7 billion

Total Return: +23%

Sell Havas

Since I recommended Havas about a month and a half ago, the stock is up about 19% while the Euro has appreciated ~4%. As such, the position has appreciated by ~23% in a month and a half. While my price target of €1.89, implies additional upside of 20%, the stock is not as compelling of a bargain today. I plan to sell my HAVAS shares and redeploy proceeds into higher conviction ideas.

Quick Review

I recommended Havas in early April 2025 when the markets were in full panic mode given tariff announcements.

At the time, I thought the selling pressure was overblown given Havas is a global advertising agency with no tariff exposure.

I also thought that Havas being a recent spin-off contributed to the selling pressure.

At the time, the stock traded at a discount to all its peers on every metric.

Since early April, the stock has performed well.

While my conservative price target implies ~20% upside (not including a 5% dividend yield), I’m going to sell the shares and redeploy proceeds into higher conviction ideas.

Why You Might Want to Hang on To Havas

Havas is up over 20% since early April, but still looks cheap.

It is no longer the cheapest advertising agency on a P/E basis but remains the cheapest on an EV/Sales and EV/EBIT basis.

Two upcoming catalysts could take place at Havas’s annual meeting on Wednesday May 28, 2025.

At the meeting an €0.08 dividend and a share repurchase authorization for 10% of shares outstanding will be approved. I’m curious how active Havas will be in executing its share repurchase authorization. One concern I have is that the company doesn’t have a ton of excess cash (after its dividend and typical small acquisitions) to buy back its stock.

If I see signs that the company is aggressively buying back its stock, I may recommend buying HAVAS again.

Disclosure/Disclaimer:

Rich Howe owns shares of HAVAS but plans to sell them. All expressions of opinion are subject to change without notice. All published emails/articles/correspondence is provided for informational purposes. We do not warrant the completeness or accuracy of this content. Please do your own due diligence and consult with an investment adviser before buying or selling any stock mentioned on www.stockspinoffinvesting.com.