Teleperformance: share price surges, Stifel upgrades to buy
January 19, 2024 at 05:09 am EST
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Teleperformance shares soared by almost 6% on the Paris Bourse on Friday, following a recommendation upgrade by Stifel, which believes that the customer experience outsourcing specialist is on the cusp of a "new beginning".
Shortly before 11:00 a.m., the share price rose by 5.9%, by far the biggest gainer on a CAC 40 index that was up just 0.1%.
In a note published in the morning, Stifel analysts said they had raised their recommendation on the share from 'hold' to 'buy', with a price target raised from 170 to 200 euros.
The research firm, which explained that it had revised upwards its earnings forecasts for the group following the acquisition of Majorel, said it expected the 2024 financial year to mark an 'inflexion' after the difficulties encountered last year.
Stifel thus anticipates a gradual improvement in sales growth, with a continued 'solid' performance in terms of profit margins.
'Furthermore, we consider the current valuation of the stock to be attractive, insofar as it does not represent the company's solid fundamentals or its status as a leader within the sector, while incorporating an excessively negative scenario regarding the implications of AI', it adds.
While acknowledging that the stock could prove volatile in the short term, Stifel sees an attractive risk/return profile in view of a revaluation that could, in his view, extend over several years and lead the share price to more than double in three years.
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Teleperformance SE is no. 1 worldwide in outsourcing and corporate consulting services for customer relation management. Net sales break down by activity as follows:
- customer experience management services (83.7%): customer information, technical assistance, customer acquisition, back-office services. The group also offers integrated services for business process management and digital transformation and high added value consulting services. Net sales are distributed by geographic region between Europe/Middle East/Africa (36.3%), North America and Asia/Pacific (36.3%), Latin America (22.5%) and other (4.9%);
- specialized services (16.3%): online interpreting, visa application management and debt collection.
At the end of 2023, the group had over 490,000 employees in 99 countries and offers its services in over 300 languages across over 170 markets.
Net sales by customer sector break down into healthcare (56%), government services (13%), insurance (10%), financial services (7%) and other (14%).