Value Column by Hans Peter Schupp

8 JULY, 2026

Havas: What’s the catch?

Hans Peter Schupp of Fidecum AG, an advisor to the Contrarian Value Euroland Fund (ISIN: LU0370217092), explains what he looks for when investing in undervalued stocks.

When we find undervalued stocks, the first question we ask ourselves is: What’s the catch? After all, some stocks are cheap because the business is under structural pressure. With others, however, the capital market fails to properly assess the business model. Or the company has, for whatever reason, fallen off the radar of many investors.

Unusually low valuations pique our interest

One of the companies that caught our attention in this context is the globally active French advertising, media, and communications group Havas N.V. (ISIN: NL0015002K83). Havas was founded in Paris in 1835 as one of the world’s first modern news agencies. After World War II, Agence Havas evolved into what is now Agence France-Presse (AFP). Since 2017, Havas had been part of the Vivendi SE group (ISIN: FR0000127771). At the end of 2024, as part of Vivendi’s spin-off, Havas was listed independently on the stock exchange again—and is now listed in Amsterdam.

With an enterprise value-to-EBIT ratio of only about 3.5, Havas is strikingly undervalued. After all, this metric is currently more than 40% below the industry average. The key question, therefore, is: Is there an operational problem here, or is there another reason?

Industry Comparison

The global advertising market is dominated by a few large companies. Leading the pack are Omnicom Group Inc. (ISIN: US6819191064) and Publicis Groupe SA (ISIN: FR0000130577). They are followed by WPP plc (ISIN: JE00B8KF9B49) and Dentsu Group Inc. (ISIN: JP3551520004). Havas is by far the smallest of the five major players.

However, being small is not automatically a disadvantage in this industry. The case of WPP shows, in fact, that size can also become a burden. The company has been acquiring businesses for years without sufficiently integrating the structures. Size turned into complexity, and diversity turned into internal competition. Publicis exploited this weakness and gained clients; WPP, on the other hand, lost revenue, margins, and market confidence.

Havas is not affected by such problems. The company is more streamlined than its competitors and continues to grow organically despite a challenging advertising market. In 2025 and the first quarter of 2026, the set operating targets were met, including an improved margin. We do not see any serious structural problems.

Artificial Intelligence—Risk or Opportunity?

So is Havas perhaps being fundamentally misjudged? A key factor in this context is the influence of artificial intelligence. Currently, there is widespread skepticism among investors toward advertising agencies. This is because AI is transforming the industry: content production, media optimization, translation, reporting, and campaign adjustments can increasingly be automated.

For Havas, artificial intelligence poses a risk primarily in areas where work is repetitive: text variations, image adjustments, media optimization, translations, and reporting. The part of the business that involves brand understanding, customer relationships, and the right communication strategy is less affected. In these areas, the consulting aspect remains crucial. Artificial intelligence can therefore also help Havas: It makes implementation faster and more cost-effective without completely replacing the strategic core. This results in a productivity boost.

The key question will be whether Havas can use artificial intelligence in the future to translate strategies into action more efficiently. So far, this seems to be working. Margin trends are positive, and there is no discernible negative impact on revenue. That is encouraging.

Was Havas simply forgotten?

Perhaps investors simply lost track of Havas stock. Before Vivendi’s spin-off in 2024, many shareholders had bet on the individual components (Vivendi Holding, Havas, Canal+ Group, and the Louis Hachette publishing house) increasing in value and then sold them after the spin-off. Out of sight, out of mind? What’s interesting to us is that Vivendi’s major shareholder, Vincent Bolloré, took a different approach. He increased his stake in Havas from just over 30 percent to more than 50 percent—a move we find encouraging.

Conclusion

Havas is certainly not a risk-free investment. The company is small compared to industry leaders, its stock history is short, and it is controlled by its majority shareholder, Vincent Bolloré. Additionally, artificial intelligence will transform parts of the business.

However, we haven’t found any major drawbacks. In our view, Havas’s low valuation does not stem from acute operational risks, but rather from a lack of understanding of its business model and limited visibility. That is precisely where the opportunity lies. If Havas meets its targets over several years, this valuation gap is likely to close. That is why we are invested in the company.

Our Investment Approach

For 30 years, the Contrarian Value Euroland Fund has been investing in undervalued European companies with solid business models and growth potential. To us, our investments are not just lines on a stock ticker—they are companies.

About the author: Hans Peter Schupp is a member of the Executive Board of Fidecum AG.

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