4 Strong Value Stocks in the European Market
The core of value investing is finding companies in the market whose stock price is reasonable, but whose business operations are strong and growing. In the current economic environment, it is especially important to distinguish true value propositions from those stocks that seem cheap only because their fundamentals are deteriorating – these are called value traps. We are in early April 2026, which means new first-quarter results are expected soon. In the meantime, we have selected four European companies that offer a good balance between valuation and business quality, while avoiding traps with declining profits.
SPIE trades at an attractive valuation, with a P/E ratio of 15,6, fitting well within the framework of classic value investing. The company's operating profit grew by 11,1% in the last quarter of 2025, reaching 271,5 million euros. Although the stock price has recently fallen to the 43,94 euro level due to concerns about free cash flow, the valuation remains reasonable compared to competitors and reflects the company's true value.
The business is driven by strong demand for energy transition services, especially in Germany, and a new eight-year contract with TenneT confirms the company's solid market position. The main risks to monitor are weaker-than-expected free cash flow and a slight decline in the French market. For investors, it is important to know that SPIE's long-term profit growth seems sustainable if they can successfully manage their cash flows and integrate new acquisitions.
Jerónimo Martins trades at a slightly higher P/E ratio of 20,8, but this is supported by strong 8,7% revenue growth, which reached 9,45 billion euros. Preliminary data shows a 12,2% growth in operating profit, confirming the company's good momentum. The stock currently trades around 20,96 euros, reflecting a stable valuation in the consumer staples sector, where investors are willing to pay a bit more for quality.
The company's results are driven by strong sales volumes in the Polish Biedronka chain and successful expansion in Colombia and Slovakia. However, investors should monitor the pressure on margins resulting from low food inflation and rising wage costs. The success of this investment depends on the company's ability to maintain its aggressive pricing strategy and market share without compromising long-term profitability in a highly competitive environment.
Zalando's valuation, with a P/E ratio of 26,3, is above the traditional value range, but it is supported by a strong 19,9% growth in operating profit to 262,1 million euros. The stock price has recently risen to 21,24 euros, supported by good quarterly results and the addition of an AI expert to the supervisory board. This shows that the market appreciates the company's improving profitability and efficiency, being willing to accept a higher multiple.
The main growth driver is the high-margin retail media business line, which grew by 42%, and the increase in active customers to 62 million. The biggest risks are growing marketing and logistics costs, as well as expenses related to the integration of the ABOUT YOU platform. The company's long-term success depends on whether it can continue to use artificial intelligence and retail media to offset operating costs and improve profit margins.
Inditex's P/E ratio is 26,9, which reflects the company's strong position in retail, while offering a stable 9,4% operating profit growth to 2057,0 million euros. The stock trades at the 51,36 euro level, having experienced a slight decline despite record profit numbers. This valuation points to a high-quality business where one pays for stability and solid execution, even if the price seems steep at first glance.
The success is driven by high demand for Zara's new collections and an efficient local sourcing model that helps avoid global supply chain disruptions. Risks to monitor include the negative impact of exchange rates and broader geopolitical tensions that could affect consumer confidence. Overall, Inditex offers a resilient business model, but the higher valuation means the company must continue its flawless execution to justify its value.
Conclusion
In conclusion, this selection shows that finding reasonably priced, high-quality companies is entirely possible, even if the multiples of some stocks are slightly above the traditional value range. The common strength of these four companies is a clear and functioning business model and the ability to grow operating profit even in more challenging conditions. For investors, this is a good reminder that a low P/E ratio alone does not make a stock a good investment – one must always look behind the numbers and ensure that a cheap price does not hide structural problems, i.e., a value trap.
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