Stifel downgrades Teleperformance, but sees 'rationale' in Majorel acquisition

Majorel Luxembourg SA

27/04/2023 15:24

** Stifel cuts French outsourcing company Teleperformance
 TEPRF.PA  to "hold" from "buy" following the group's proposed
acquisition of its Luxembourg-based competitor Majorel  MAJ.AS 
    ** While Stifel says it understands "the rationale behind
the deal", it sees little reason over the next 6-12 months for
the shares to rebound
    ** It points to the series of "confusing announcements and
disappointing earnings releases" over the last few months,
overhang from the Majorel deal execution and the uncertainties
from AI's integration into Teleperformance's activities
    ** Still, Stifel sees it as a positive that Teleperformance
is actively taking part in industry consolidation 
    ** "We think that market leaders are increasingly gaining
competitive advantages which should help the company to continue
gaining market share," brokerage says
    ** Stifel adds it should also bring geographic
diversification through Majorel's European footprint while
enlarging the portfolio of clients
    ** Shares in Teleperformance fell 14% on Wednesday
    ** Of 18 analysts that cover Teleperformance, 16 rate the
stock "strong buy" or "buy", one rates it "hold" and one "sell"
    

 (Reporting by Victor Goury-Laffont)
 ((victor.goury-laffont@thomsonreuters.com))