EDENRED : Deutsche Bank reduces its target, but remains Buy
March 26, 2024 at 11:21 am EDT
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On Tuesday, Deutsche Bank cut its target price for Edenred from €69 to €68, while renewing its buy recommendation on the meal voucher specialist.
In a research note, the analyst highlights the market's low penetration rate (< 25%), but stresses the positive impact of digitalization, which it believes should accelerate both growth and profitability.
The intermediary points out that Edenred and Pluxee, the two world leaders in the sector, should thus benefit from double-digit structural growth in sales.
In terms of profitability, Edenred has a clear lead with an operating margin of 43.5%, compared with 34.5% for Pluxee, a difference it explains by the size of the company, two and a half times larger than its rival.
This gap is set to widen further, according to DB, which sees Edenred's margin improving by 12% in organic terms each year, while Pluxee's should reach 37% within two years.
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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 45 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.