Stifel reaffirms its 'hold' recommendation on OVHcloud, but lowers its target price from €18 to €11, believing that pricing and cost control need to be improved for the cloud computing service provider.
Rather than struggling to break even at EBIT level, OVH should theoretically show EBIT margins at the top end of the 10-20% range, given its business model', the broker judges.
Stifel nevertheless believes that while outgoing shareholders and eroded confidence should impose a ceiling on the share price, 'the free cash flow yield from the installed base could limit the downside risk'.
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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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