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Investing.com - Berenberg has lowered its price target on Sodexo (EPA:EXHO) (OTC:SDXAY) to EUR71.00 from EUR81.50 while maintaining a Buy rating on the food services company. The stock, currently trading at $12.66, has declined over 23% year-to-date, though InvestingPro analysis suggests it remains undervalued.
The adjustment follows Sodexo’s indication that growth in fiscal year 2025, ending August 31, will be at the lower end of its guidance range, despite reporting better-than-expected third-quarter results compared to consensus estimates.
Berenberg cited ongoing pressures across Sodexo’s business segments, with specific mention of further challenges in the North America Education division, as key factors behind the reduced price target.
The investment firm has lowered its estimates for both FY25 and beyond, reflecting these operational headwinds and management’s cautious outlook on near-term performance.
Despite the price target reduction, Berenberg maintained its Buy recommendation, noting the new target still represents approximately 30% upside from current levels, though it cautioned that Sodexo "has a lot to do to restore confidence" and is unlikely to see share price appreciation until the business shows signs of stabilization.
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