EU business services: Bernstein sees TIC as "fundamentally attractive"

Elior SA

19/04/2023 11:35

** Bernstein initiates coverage on European business
services, favouring the testing, inspection and certification
(TIC) sector on faster growth post-Covid and reshoring
opportunities
    ** The brokerage sees the Consumer Products segment as the
"most attractive end market" within TIC, says it will be the
"battleground for success" over the next decade of earnings
growth
    ** "Faster Consumer Product growth will go to the companies
that offer the most technical services," it adds
    ** It says reshoring fears are "overdone", sees moving
supply chains as opportunities rather than headwinds and
"strong" global trade continuing to drive demand for TIC
services
    ** The shifting of some low-value goods supply chains out of
China is counteracted by a growth in higher value manufacturing
in the country, it adds
    ** Contract Catering stocks have also outperformed in 2023
following disruption during the Covid-19 pandemic, says
Bernstein, noting "plenty of room" for accelerated outsourcing
and new contract wins
    ** The broker initiates coverage of Swiss TIC group SGS
 SGSN.S , employee benefits firm Edenred  EDEN.PA  and catering
services company Compass  CPG.L  with an "outperform" rating
    ** It rates Eurofins  EUFI.PA , Bureau Veritas  BVI.PA , and
Elior  ELIOR.PA  "underperform"
    ** It rates Intertek  ITRK.L , Sodexo  EXHO.PA  , Experian
 EXPN.L  and Aramark  ARMK.N  "market-perform"

 (Reporting by Anna Mackenzie)
 ((Anna.mackenzie@thomsonreuters.com))