Sodexo: Oddo BHF, still rates 'reduce,' but ups target
(CercleFinance.com) - On Monday morning an analyst at Oddo BHF announced that he is raising his target price for the Sodexo share, which he has raised to 85 euros, ahead of the group's Investor Day on 6 September, when there will be three items on the menu.
These include, what is the group's plan to revitalise organic growth? What is the level of visibility on the recovery of Sodexo's margins? And with FCF generation that remains solid, what is the group's financial structure?
In the broker's opinion, the central question remains improvements relating to the recent reorganisation by segment, rather than by geographic area. Indeed, Sodexo tends to underperform its main peers - especially in North America. For several years now, the group has been trying to renew with strong commercial growth and continue to improve its client's loyalty. Oddo BHF believes that this is likely to call into question its strategy that is primarily focused on Facilities Management, while the group appears to be losing market share in contract catering.
The analyst also maintains his "reduce" rating on the stock, given the uncertain timing of a recovery. He says that while the sector fundamentals sector remain “healthy,” he remains cautious in the near term as the recovery of organic growth and margins could take longer than expected.
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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.
These include, what is the group's plan to revitalise organic growth? What is the level of visibility on the recovery of Sodexo's margins? And with FCF generation that remains solid, what is the group's financial structure?
In the broker's opinion, the central question remains improvements relating to the recent reorganisation by segment, rather than by geographic area. Indeed, Sodexo tends to underperform its main peers - especially in North America. For several years now, the group has been trying to renew with strong commercial growth and continue to improve its client's loyalty. Oddo BHF believes that this is likely to call into question its strategy that is primarily focused on Facilities Management, while the group appears to be losing market share in contract catering.
The analyst also maintains his "reduce" rating on the stock, given the uncertain timing of a recovery. He says that while the sector fundamentals sector remain “healthy,” he remains cautious in the near term as the recovery of organic growth and margins could take longer than expected.
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.