Elior: Bryan Garnier remains a seller after profit warning.
(CercleFinance.com) - Broker Bryan Garnier this morning confirms its "sell" rating on the Elior share, with the contract catering group having recently made a profit warning, which has resulted in the share collapsing.
The broker maintains its target price of 28 euros.
At three weeks from the announcement of its FY 2016/2017 results, which is scheduled for 6 December, this morning Elior cut its earnings estimates.
Indeed, on the one hand, organic sales growth over 2016/17, excluding contract exits, has been increased from “at least 3%” to 3.6%. However, on the other hand, the group's adjusted EBITDA margin is now expected at 8.3%, while previously management expected it to improve by 20 bp - 30 bp relative to its level in 2015/16 (8.6%). Finally, the target of significant adjusted EPS will not be reached, the group said.
Alongside this, Elior has appointed a new CEO, Philippe Guillemot, who will take office on 5 December.
Bryan Garnier underlines stronger growth than initially expected. However, "That new guidance mainly reflects 1) start-up costs for new contracts (Education in France or with the Italian Ministry of Defense), 2) the impact of the hurricanes and 3) the lower than expected positive effects of cost-savings," the broker writes in a research report.
Copyright (c) 2017 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 broker maintains its target price of 28 euros.
At three weeks from the announcement of its FY 2016/2017 results, which is scheduled for 6 December, this morning Elior cut its earnings estimates.
Indeed, on the one hand, organic sales growth over 2016/17, excluding contract exits, has been increased from “at least 3%” to 3.6%. However, on the other hand, the group's adjusted EBITDA margin is now expected at 8.3%, while previously management expected it to improve by 20 bp - 30 bp relative to its level in 2015/16 (8.6%). Finally, the target of significant adjusted EPS will not be reached, the group said.
Alongside this, Elior has appointed a new CEO, Philippe Guillemot, who will take office on 5 December.
Bryan Garnier underlines stronger growth than initially expected. However, "That new guidance mainly reflects 1) start-up costs for new contracts (Education in France or with the Italian Ministry of Defense), 2) the impact of the hurricanes and 3) the lower than expected positive effects of cost-savings," the broker writes in a research report.
Copyright (c) 2017 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.