'Turmoil set to continue': Stifel downgrades Elior post last week's guidance cut

Elior SA

03/08/2023 09:02

** Shares in Elior  ELIOR.PA  fall close to 6% to the bottom
of France's SBF 120  .SBF120  index after Stifel cut its rating
to "sell" from "hold" on a "turmoil set to continue"
    ** The company last week cut FY EBITA margin target to 1%
from between 1.5%-2%
    ** Stifel says this is the second margin guidance cut this
year, pointing to higher-than-expected start-up costs from new
contracts, even though Elior says effects should be temporary
    ** The broker cuts its FY EBITA estimates by 46% to EUR 40
mln, by around 23% for FY 2024-2026, and does not see "a return
to positive FCF generation before FY25, reflecting the
combination from inflation and structural weaknesses"
    ** It also cuts its TP to EUR 1.9 from EUR 3.3, leaving a
downside potential of around 15%

 (Reporting by Olivier Cherfan)
 ((olivier.cherfan@thomsonreuters.com))