u/Senior-Preference678

RHM’s EPS is projected to rise from ~€18.5 (2025) to ~€38.5 (2027), a doubling in two years, yet the PEG ratio sits at 0.5–0.6, far below the typical >1.0 for quality industrials. This PEG discount suggests the market is pricing in temporary growth or a rapid slowdown, but the author argues Europe's underinvestment in defense and multi-year backlog create sustained demand, making the current valuation a buying opportunity. If EPS reaches €38.5 by 2027 and the market re-rates to a still-moderate 25x P/E, the stock would be worth significantly more than today’s €930, offering a compelling risk/reward for long-term investors. Defense spending slowdown, Ukraine de-escalation, government procurement delays, or earnings misses could invalidate the thesis.

RHM’s EPS is projected to rise from ~€18.5 (2025) to ~€38.5 (2027), a doubling in two years, yet the PEG ratio sits at 0.5–0.6, far below the typical >1.0 for quality industrials. This PEG discount suggests the market is pricing in temporary growth or a rapid slowdown, but the author argues Europe's underinvestment in defense and multi-year backlog create sustained demand, making the current valuation a buying opportunity. If EPS reaches €38.5 by 2027 and the market re-rates to a still-moderate 25x P/E, the stock would be worth significantly more than today’s €930, offering a compelling risk/reward for long-term investors. Defense spending slowdown, Ukraine de-escalation, government procurement delays, or earnings misses could invalidate the thesis.

Sony trades at ~20x TTM P/E, in line with historical averages, with a DCF fair value estimate of ~$33 per share, strong 12% operating margins, and an S&P A+ credit rating. The market is ignoring Sony’s transformation into an entertainment/IP platform, pricing it as a legacy electronics company while AI hype inflates multiples elsewhere. This mismatch creates a revaluation opportunity. Sony is a high-quality, diversified compounder with durable revenue streams trading at a reasonable valuation; the risk/reward is attractive for long-term investors. Gaming cyclicality, yen exposure, slower growth in image sensors, or a broader market sell-off could pressure the stock. Lack of AI narrative may keep multiples compressed.