If it was valued at €260k and, say, myhome.ie says €320k, it looks like it is undervalued, but this is hardly something to feel 'gutted' about.
I don't know if it is reasonable to assume that perhaps the valuation is down to inexperience on part of the agent, or that they feel they will get more interest by setting the 'guide' at well under the stamp duty threshold (i.e. if people search for properties under €317k, they will miss a house valued at €320k), or something more sinister, i.e. they are trying to get their friend/family member a house for under market value.
One thing to remember is that the agent should have little or no incentive to get you less money (all that really matters at the end of the day) as I assume they are paid on commission based on the final sale price.