Atos: stock slumps with Goldman Sachs' downgrade
(CercleFinance.com) - On Thursday Goldman Sachs downgraded Atos shares from "neutral" to "sell" with a target price that it has almost divided by three, from 23 to eight euros.
In a report, the analyst believes that the turnaround plan developed by the management team - consisting of a separation of the outsourcing (TFCo) and digital transformation (SpinCo) businesses by the second half of 2023 - is "complex" and "ambitious", thereby limiting the group's visibility.
Goldman said it expects Atos' financial position to remain fragile over the next 12 to 18 months, which it said could result in an increase in debt, which in turn could lead to loan covenants being breached, although they have been reviewed in the past.
The broker, which is concerned about the uncertainty surrounding the financing and successful execution of the turnaround, as well as the effects of the economic downturn, have led it to reduce its revenue outlook for the company.
The share is down sharply (currently over 14%), this morning.
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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.
In a report, the analyst believes that the turnaround plan developed by the management team - consisting of a separation of the outsourcing (TFCo) and digital transformation (SpinCo) businesses by the second half of 2023 - is "complex" and "ambitious", thereby limiting the group's visibility.
Goldman said it expects Atos' financial position to remain fragile over the next 12 to 18 months, which it said could result in an increase in debt, which in turn could lead to loan covenants being breached, although they have been reviewed in the past.
The broker, which is concerned about the uncertainty surrounding the financing and successful execution of the turnaround, as well as the effects of the economic downturn, have led it to reduce its revenue outlook for the company.
The share is down sharply (currently over 14%), this morning.
Copyright (c) 2022 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.