Atos: Oddo cuts target price
(CercleFinance.com) - Oddo has confirmed its buy rating on the Atos stock, although has cut its target price to 132 euros.
The integration of debt related to the transferred accounts receivable (865 million euros at end-2018e) justifies an 8 euro cut in our target price. We are also taking into account a lower generation of FCF over the next fiscal years, Oddo says in its daily equity report.
The broker now calculates the FCF yield excluding the transfer of accounts receivable. After taking into account these items, and after the share's fall in August (in line with the reduction in the broker's target price), Atos' multiples remain attractive: 2019 EV/EBITof of 9.5x and a 2019 FCF yield of 7.3% (vs. 11.0x and 6.2% respectively for peers), which is despite the higher valuation Worldline (21.7x and 3.5% respectively), the broker adds.
The acceleration of organic growth in Q3 remains a trigger for the share, even though certain investors will remain hesitant prior to the publication of FY 2018 FCF, Oddo explains.
Copyright (c) 2018 CercleFinance.com. All rights reserved.
The information and analyses distributed by Cercle Finance are only intended as decision-making support for investors. Cercle Finance's responsibility may not be entailed, either directly or indirectly following the use of such information and analyses by readers. Any non-professional investor is recommended to consult a professional advisor before making any investment decision. This indicative information in no way constitutes any invitation to sell or buy securities.
The integration of debt related to the transferred accounts receivable (865 million euros at end-2018e) justifies an 8 euro cut in our target price. We are also taking into account a lower generation of FCF over the next fiscal years, Oddo says in its daily equity report.
The broker now calculates the FCF yield excluding the transfer of accounts receivable. After taking into account these items, and after the share's fall in August (in line with the reduction in the broker's target price), Atos' multiples remain attractive: 2019 EV/EBITof of 9.5x and a 2019 FCF yield of 7.3% (vs. 11.0x and 6.2% respectively for peers), which is despite the higher valuation Worldline (21.7x and 3.5% respectively), the broker adds.
The acceleration of organic growth in Q3 remains a trigger for the share, even though certain investors will remain hesitant prior to the publication of FY 2018 FCF, Oddo explains.
Copyright (c) 2018 CercleFinance.com. All rights reserved.
The information and analyses distributed by Cercle Finance are only intended as decision-making support for investors. Cercle Finance's responsibility may not be entailed, either directly or indirectly following the use of such information and analyses by readers. Any non-professional investor is recommended to consult a professional advisor before making any investment decision. This indicative information in no way constitutes any invitation to sell or buy securities.