On Friday, TP ICAP Midcap initiated coverage of OVH Groupe's shares with a sell recommendation and a target price of 3.9 euros.
In a research note, the brokerage firm criticizes the cloud computing service provider for growth "paid for at a high price".
In our opinion, the cost of growth is so high as to lead to value destruction, both in terms of ROCE and the productivity ratio of growth capex", stresses the investment bank.
In addition, the Group is facing major challenges in terms of both growth and the regulatory environment, making its long-term prospects more uncertain", adds TP ICAP.
Its price target thus shows a potential downside of 32% compared with last night's close.
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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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