Oddo BHF views Edenred's release as broadly reassuring
Oddo BHF reiterates its Outperform rating on the stock with an unchanged price target of 26 E following the publication of Q1 figures and 2026 guidance.
Edenred is maintaining its forecasts for the 2026 financial year, which factor in regulatory impacts in Italy and Brazil.
Oddo BHF notes that these forecasts notably project an 8% to 12% decline in organic EBITDA for 2026 (consensus: -10.5%) and a FCF/EBITDA conversion rate of at least 35% (consensus: 38%, Oddo BHF estimate: 36%).
'The group is also maintaining its 2027-2028 guidance, namely organic EBITDA growth of 8% to 12% (consensus: +8% for 2027) and a FCF conversion rate of at least 65% (consensus: 64%)' the research house states.
Given that the 2026 guidance remains unchanged, Oddo BHF does not anticipate any significant adjustments to consensus estimates.
Oddo BHF believes that the ability to adapt to ongoing regulatory changes will be essential in the coming months.
The analyst considers this release to be broadly reassuring regarding underlying trends, and the confirmation of the outlook should not lead to any significant consensus revisions.
According to Oddo BHF, Edenred's long-term growth potential remains solid, supported by low penetration in its markets.
'However, regulatory risk constitutes the main threat to its business. Our fundamentally positive stance is based on: 1) strong growth prospects; 2) significant remaining potential for margin improvement; and 3) solid free cash flow generation' the analyst emphasizes.
'Edenred's valuation at 10.3x 2026e P/E suggests a 60% discount compared to its average 12-month forward multiple over the last nine years' Oddo BHF adds in conclusion.
Edenred SE is a leading digital services and payments platform and the everyday companion for people at work, connecting over 60 million employees and more than 2 million partner merchants in 44 countries via nearly 1 million corporate clients.
Edenred SE offers specific-purpose payment solutions for food (meal benefits), incentives (gift cards, employee engagement platforms), mobility (multi-energy, maintenance, toll, parking and commuter solutions) and corporate payments (virtual cards). These solutions enhance employee well-being and purchasing power, improve companies' attractiveness and efficiency, and vitalize the employment market and the local economy.
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