Sodexo: Bryan Garnier upgrades to buy; targets 120 euros
(CercleFinance.com) - Bryan, Garnier & Co.
has taken a more aggressive position towards Sodexo, whose share has, against the general trend, fallen since the beginning of the year. As such, analysts have upgraded their "neutral" rating on the stock to buy, while raising their target price from 101 euros to 120 euros (+18.8%).
Analysts believe that in a "difficult environment," the group has spared no effort in adapting over the last two years, particularly in the Health & Seniors and Education sectors. These are all reforms that are about to "bear fruit".
Indeed, "although the new organizational structure is still weighing on performances of some businesses, the first positive effects are encouraging and should boost earnings in a more buoyant macroeconomic environment". In addition, the note highlights Sodexo's "aggressive" acquisition strategy in recent months, which should enhance supply and accelerate growth.
Not to mention that the tax cuts in the US will boost the group's accounts: Sodexo's tax rate is expected to decline by 400 basis points in 2018, which means a positive impact of at least 6% on the group's EPS, analysts estimate.
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.
has taken a more aggressive position towards Sodexo, whose share has, against the general trend, fallen since the beginning of the year. As such, analysts have upgraded their "neutral" rating on the stock to buy, while raising their target price from 101 euros to 120 euros (+18.8%).
Analysts believe that in a "difficult environment," the group has spared no effort in adapting over the last two years, particularly in the Health & Seniors and Education sectors. These are all reforms that are about to "bear fruit".
Indeed, "although the new organizational structure is still weighing on performances of some businesses, the first positive effects are encouraging and should boost earnings in a more buoyant macroeconomic environment". In addition, the note highlights Sodexo's "aggressive" acquisition strategy in recent months, which should enhance supply and accelerate growth.
Not to mention that the tax cuts in the US will boost the group's accounts: Sodexo's tax rate is expected to decline by 400 basis points in 2018, which means a positive impact of at least 6% on the group's EPS, analysts estimate.
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.