Street Calls of the Week
Investing.com - Berenberg downgraded Sodexo (EPA:SW) stock rating from Buy to Hold and lowered its price target to EUR56.00 from EUR71.00 following the company’s fiscal year 2025 results.
The French food services and facilities management company reported FY25 results on October 23 that aligned with its revised guidance. Despite meeting these adjusted expectations, Sodexo’s FY26 organic growth and margin guidance fell below market expectations.
Berenberg cited the company’s need to restore investor confidence as a key concern. The firm noted that Sodexo has signaled business changes, including investments in sales staff, that will impact margins going forward.
The upcoming leadership transition adds another layer of uncertainty, with a new CEO scheduled to take over next month who could potentially implement further operational changes.
Berenberg now views Sodexo as a "Show me story" with a balanced risk/reward profile, prompting the downgrade and reduced price target.
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