Sodexo: Morgan Stanley cuts target price
(CercleFinance.com) - Morgan Stanley maintains its "underweight" rating on Sodexo and has cut its target price for the share from 98 euros to 84 euros, as well as its EPS estimates, after the profit warning made by the service group last Thursday.
The broker underlined that Sodexo's warning raises more questions - especially regarding lower margins on new contracts and labor cost inflation in the United States.
It continued, saying that this implies that the group may have to make a stronger-than-expected recovery and that margins could fall again in 2019 amid restructuring and renewed capex.
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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.
The broker underlined that Sodexo's warning raises more questions - especially regarding lower margins on new contracts and labor cost inflation in the United States.
It continued, saying that this implies that the group may have to make a stronger-than-expected recovery and that margins could fall again in 2019 amid restructuring and renewed capex.
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.