Teleperformance shares are 'oversold' on AI fears, RBC says
07/06/2023 12:30
** RBC says Teleperformance TEPRF.PA shares are
"materially oversold" as investors worry about AI-related
disruptions to the French call centre group without taking into
account potential benefits
** It says the share price, down about 36% YTD, "discounts
the potential for (Teleperformance) to continue to adapt,
capitalise on new AI-driven revenue streams or benefit from
increased outsourcing penetration and organic market share
gains"
** "Over the medium term, significant new functions will be
required from outsourced (customer experience) providers
managing a hybrid of human + AI solutions, driving increased
outsourcing penetration and creating brand-new revenue streams"
- RBC
** Teleperformance's proposed acquisition of Majorel
MAJ.AS makes sense financially and strategically, the broker
says, but its timing has raised suspicions of it being a
defensive move to brace for AI disruption
** RBC assumes the dominance of fully automated
conversational AI by 2043, which will hit the industry, but adds
that in short-term GPT-AI models are likely to only remain
"tentative"
** Teleperformance shares rise about 2.2%, outperforming
France's blue-chip CAC40 index .FCHI which is roughly flat
** The broker slashes PT by 29% to EUR 230 "with asymmetric
risk to the upside", as it incorporates Majorel acquisition into
its models
** "Our old price target becomes our new 'Bull' scenario ...
our new 'Bear' scenario suggests downside is fundamentally
limited from here" - RBC
(Reporting by Olivier Sorgho)
((Olivier.Sorgho@thomsonreuters.com))