Published on 11/20/2024 at 10:11 a.m.
(Boursier.com) — Elior collapsed by 17.3% to 3.4 euros after the presentation of rather solid annual accounts. Operators are in fact sanctioning guidance deemed too cautious while management is targeting organic revenue growth of between +3% and +5% for the 2024-2025 financial year with an adjusted EBITA margin greater than 3%. .
“Although we completely understand the prudence of management and the desire to over-deliver as in 2024, taking the mid-range of the guidance would imply reducing our 2024 EPS expectations by -25%,” explains TP ICAP Midcap, at ‘purchase’ on file.
This annual publication is reassuring on the group’s operational trend, particularly on profitability, the implementation of synergies and cost reduction, explains Oddo BHF (‘underperform’). However, from a sectoral point of view, the broker believes that the group’s situation (growth levels, profitability, FCF generation and debt) appears less attractive than its main competitors Sodexo and Compass (notably retention and net new business weaker), which have rebounded more quickly since the end of the pandemic. He remains confident about the fundamentals of the collective catering sector and its resilience, in a favorable context (slowing food inflation, continued return of employees to the site, upscaling of offers and innovation, etc.). In relative terms, Elior’s valuation remains relatively high, particularly after the sharp rise in the price this year (+40%), with a 2025 EV/EBIT multiple of 9.9x (vs Sodexo 10.9x and ISS 7.6x ) but suggests a 25% discount compared to its historical multiple…
“The forecast for the 2024-2025 financial year is a little too conservative, although largely in line with our estimates, with a slightly different balance, with Elior focusing more on profitability than on winning new contracts,” finally notes JP Morgan.
