The analyst believes that the Q1 2026 performance (+3.2% LFL and +4.4% excluding SFT) is the best possible response to fears of AI-driven disruption in the IT services sector.
'While the uncertain environment does not support an upgrade in expectations, this start to the year secures them, as do the guidances reaffirmed yesterday with confidence,' the research firm stated.
'Our 2026-28e EPS are slightly raised (+0.7%/+2.4%/+2.1%) to incorporate the acquisitions of Starion and Nexova, as well as the modest share buyback program (1.8% of capital) announced yesterday,' Invest Securities added.
The analyst points out that while an increased risk premium explains the lower price target (228EUR vs 244EUR), the upside remains particularly significant given a completely depressed valuation (2026-27e EV/EBITA of 5.8x-5.0x, 2026e FCF yield before WCR of 12.6%!).
According to the broker, the relevant positioning (sovereignty in Europe), valuation, and the return of positive momentum support its buy recommendation.
Sopra Steria Group is one of the leading French companies providing IT services. Net sales break down by activity as follows:
- systems integration and solutions (60%): design and implementation of Internet technology solutions (portals, merchant sites, Intranet and Extranet networks, etc.), integration of ERP solutions, implementation of application solutions (customer relationship management, HR management, etc.). The group also offers subcontracting solutions for providing technical support to users and application maintenance;
- hybrid cloud management and technology services (13%);
- outsourcing services and operation of business processes (12%): supervision, administration and operation of IT infrastructures, operation of finance, administration, human resources functions, etc.;
- consulting services (9%): strategic consulting, implementing of restructuring projects and development towards new technologies, etc.;
- business solutions development and integration (6%): solutions for finance management, human resources management and property management.
Net sales break down by market between financial services and insurance (19.9%), public sector (18.8%), energy, utilities and transport (17%), aerospace, defence and security (13.2%), telecommunications, media and entertainment (6.1%), distribution (2.7%) and other (8.2%).
54% of net sales are generated abroad.
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