Around 12:00 pm, Edenred shares were down 4.6% at 17.4 euros, returning to their lowest levels since 2016, while Pluxee dropped 5.5% to 11.1 euros, hitting a new low since its IPO in February 2024.

In a note released in the morning, UBS said it had downgraded its recommendation on Edenred from "buy" to "neutral," slashing its price target by more than half, from 42 to 19 euros.

The research firm explained that uncertainty surrounding the situation in Brazil led it to stay away from the stock, despite its historically low valuation, as it does not see any clear catalyst likely to drive the share price higher in the short term.

Even in the event of a favorable scenario in Brazil—a possibility, according to UBS, given the temporary injunction issued earlier this week by the courts—such an outcome would ultimately have only a limited impact, the bank believes. On the contrary, UBS expects that if the reform is implemented as planned this year, it will result in continued pressure on revenues.

The analyst also voiced concerns about risks linked to regulatory changes in France, as well as the prospect of an economic slowdown in Europe.

With the same causes producing the same effects, UBS also decided to downgrade its opinion on Pluxee to "sell" from "neutral," with a reduced target of 19 to 10 euros.

Once again, the research firm believes that regulatory uncertainty in Brazil remains too high for the next six to twelve months, which leads it to consider that taking a positive stance on the stock—a "pure player" in meal vouchers, which account for about 60% to 65% of its revenue—amounts to betting on a favorable regulatory outcome in Brazil.

Both stocks had enjoyed a brief respite on Wednesday, soaring by 10% and 7% respectively, following reports that a federal court in Sao Paulo had issued an injunction suspending the application of the Brazilian government's new decree to regulate the meal voucher market.

For the week as a whole, Edenred and Pluxee are down around 1.1% so far.