Stifel initiates coverage of OVH, a leading European cloud services provider listed on Euronext Paris since October 2021, with a 'hold' recommendation and a price target of 18 euros.
In addition to the market's positive longer-term characteristics, the broker sees 'growth in PaaS and, paradoxically, the inflationary environment as opportunities to improve margins and reduce capital intensity currently weighing on FCF'.
Stifel acknowledges a risk of negative earnings momentum, partly linked to delayed pass-through effects from rising costs, but believes that these pressures on margins would be transitory.
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OVH Groupe is the leading European cloud services provider, uniquely positioned to capitalize on the rapidly growing cloud market.
The Group provides business customers with a comprehensive suite of solutions designed to capture growing demand for multi-cloud and hybrid cloud strategies, while meeting the surging demand for data sovereignty and trusted cloud solutions.
OVH Groupe provides 1.6 million customers - composed largely of SMBs, large and tech enterprises, as well as the public sector - with a comprehensive suite of solutions in private, public and web cloud, leveraging its global network of 44 data centers, hosting over 500,000 servers across 4 continents.
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