Veolia: Oddo confirms rating after agreement with Suez

(CercleFinance.com) - Oddo considers that the agreement reached between Veolia and Suez is based on a balanced equation between both groups and the various stakeholders involved, even though its timing is surprising.


The broker says that the new Suez will have revenues of 6.9 billion euros and an EBITDA a priori estimated around 1 billion euros.

Veolia is taking over 10 billion euros in revenues and over 2 billion euros in EBITDA, with a business structure that enables it to confirm the 500 million euros in synergies from the project, it adds.

In its 10 November study, Oddo expected a single-digit accretion in year 1 (2022), followed by a double-digit accretion in year 2 (2023) and then a 40% accretion in year 3 (2024), based on synergies, meaning a combined medium-term ROCE after tax of 8% to 9%.

Oddo confirms its Outperform recommendation on the stock, with a target price of 28.50 euros (current price: 24.7 euros, pretty flat).


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