(Boursier.com) — Among the many publications of the day well received in Paris, Sodexo figure in a good position. The title of the collective catering and services group climbed 3% to 89.8 euros after management indicated that it expected a return to turnover and margins for 2023 at 2019 levels, i.e. internal growth of between + 8 and +10% and an operating margin close to 5.5%.
Morgan Stanley (‘online weighting’) says organic growth in the fourth quarter came in better than expected and stronger than the broker had expected. Retention is at an all-time high, feedback on contracts won is “encouraging” and net new business turned positive in the quarter, MS adds. The results should “strengthen the credibility” of the direction before the next day investors.
Jefferies (‘hold’) also calls Q4 organic growth “impressive” while guidance for fiscal 2023 is well ahead of consensus and should result in upward revisions. The results indicate that Sodexo is doing well in managing inflation, has stemmed market share losses and is now benefiting from tailwinds from outsourcing.
For Oddo BHF (‘outperform’), this is a solid and reassuring release ahead of next week’s CMD. The broker reiterates its positive opinion on Sodexo, which offers the greatest room for improvement within its sector, both in catering and in BRS (Benefits and Rewards Services), while its valuation of 13.3x VE/EBIT 2023e implies that it trades at a 21% discount to Compass and over 30% to a synthetic PE based on Edenred and Compass (vs a historical discount of 15%), and offers a 2023e FCF yield of 6.3 %.
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