JPM says recession won't stop Majorel's growth, reinstates at 'overweight'
13/10/2022 12:33
** J.P.Morgan reinstates coverage of Majorel MAJ.AS at
"overweight" but cuts its estimates for the Luxembourg-based
business services provider's 2023 earnings to reflect the
economic slowdown
** It expects Majorel to keep growing in a recession, albeit
at a slower pace, driven by demand for outsourcing,
digitisation, and its exposure to global internet clients
** JPM lowers its FY23 organic growth estimate to 8% from
11%, and EBITA margin estimate to 16.7% from 17%
** It expects Majorel to report Q3 net revenue of 502
million euros ($487 million), up around 14% YoY, and to
reiterate its 2022 targets
** JPM notes that despite "strong delivery" since its IPO in
September 2021, Majorel trades at a significant discount to
French peer Teleperformance TEPRF.PA
** The shares remain a vehicle for investors to "play market
consolidation in the CX (customer experience) space", the broker
says, and doesn't rule out another merger in the medium term
** Majorel in September halted talks over a takeover by IT
services company Sitel Group
** Six analysts covering Majorel all rate the stock "strong
buy" or "buy" - Refinitiv data
($1 = 1.0302 euros)
(Reporting by Olivier Sorgho)
((Olivier.Sorgho@thomsonreuters.com))