Refile: BUZZ-MS cuts Teleperformance on macro, AI, and Majorel deal uncertainties
04/05/2023 10:34
(Refiles to fix story formatting)
** Teleperformance's TEPRF.PA shares slide 4.5% following
a rating downgrade from Morgan Stanley to "equal-weight" from
"overweight", and a 25% PT cut to 240 euros
** MS sees the below-consensus organic growth for the past
two quarters as a sign of multiple challenges Teleperformance
faces
** The brokerage cites macro risks, the unknown structural
impact of AI, and an overhang from the proposed acquisition of
rival Majorel MAJ.AS as factors contributing to the downgrade
** MS says the process of adapting to AI could reduce the
company’s ability to resume its usual "beat and raise" trend
** However, the brokerage highlights that Teleperformance's
assessment of AI automating up to 20-30% of volumes could create
new opportunities and improve operational efficiencies
** It sees the Majorel deal as potentially not enough to
mitigate AI risks, but helping the company diversify
geographically
** The stock trades on 6x pro-forma FY24 EBITDA and 10x P/E,
MS says, seeing these valuation levels as attractive
** Its lowered PT still offers 35% upside, MS says
(Reporting by Laura Lenkiewicz)
((Laura.lenkiewicz@thomsonreuters.com))