Goldman Sachs raises price target on Teleperformance
Goldman Sachs has hiked its price target for Teleperformance shares from 60 to 67 euros, forecasting a growth recovery for the customer experience outsourcing specialist during the second half of the year.
In a research note, the U.S. investment bank acknowledges that the 2.2% contraction in first-quarter activity was slightly more pronounced than anticipated. This performance is likely to fuel investor concerns regarding the timing of a return to positive growth, which is considered essential for the group to meet its full-year guidance of 0% to 2% like-for-like revenue growth.
From the New York firm's perspective, this outlook implies a significant improvement in commercial momentum in the second half.
After the rebound, focus shifts to execution
While the bank remains cautious on core services, particularly due to the potential impact of AI, it finds management's comments regarding the gradual improvement in specialized services activities more reassuring, notably within the LanguageLine Solutions (LLS) over-the-phone and video-remote interpreting division.
Although the stock has rebounded by approximately 24% over the past month - driven by in-line results, hopes for capital redistribution under the new management team, and certain technical factors - the institution warns that a sustainable recovery in the share price will depend on rigorous execution.
'Consistent execution and the realization of revenue and margin growth will be key to a sustainable re-rating over the medium term', the note states.
Valuation remains at historical lows
On the financial front, Teleperformance is currently trading at a price-to-earnings (P/E) multiple of approximately 5x expected 2026 earnings. This represents a 'significant discount' compared to its 5-year (approx. 8x) and 10-year (approx. 18x) historical averages, reflecting the market's downward earnings revision cycle and persistent investor fears regarding the company's terminal value in the face of AI-driven technological disruption risks.
While the bank acknowledges that a sustainable return to positive growth coupled with stable margins could support the share price, it explains that it prefers to remain Neutral pending clearer signals on the timing of a potential inflection.
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 (85.5%): 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/Asia/Pacific (53.9%) and America (46.1%);
- specialized services (14.5%): online interpreting, visa application management and debt collection.
At the end of 2025, the group had nearly 490,000 employees in 100 countries and offers its services in over 400 languages across over 170 markets.
Net sales by customer sector break down into financial services (41%), administrative and government services (40%), telecommunications (12%) and retail (7%).
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