Elior: Oddo's cuts earnings forecasts

(CercleFinance.com) - Oddo believes that Elior yesterday reported slightly better than expected H1 results at the EBIT level.


The group generated positive FCF in H1 (+31 million euros), in particular thanks to strict control of Capex (1.5% of sales) and a positive WCR effect of +12 million euros (of which 18 million euros is related to the securitisation program), the analyst says.

The broker is adjusting its operating assumptions for 2021/2023, which now include a more cautious view of the organic rebound in H2 21 (FY21 at -3.5% vs. -0.8% previously, now meaning H2 at +27%, vs. +36% previously), albeit with a stronger catch-up effect in 2022/2023 (organic growth at +15% and +7.6% respectively vs. +12.9% and +4.8% previously), Oddo adds.

The analyst points out that the broker has increased its EPS guidance has been increased by an average of 7% over 2021/2023, benefiting from the adjustment of its financial cost and tax assumptions.

Oddo confirms its Underperform rating on the stock, maintaining its target price of 6.0 euros (current price: 6.7 euros, +2.4%).


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