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On Tuesday, Deutsche Bank (ETR:DBKGn) analysis led to a revised price target for Elior Group SA (EPA:ELIOR:FP), now set at EUR4.00, down from EUR4.50, while the firm maintained its Buy rating on the stock. The adjustment follows a comprehensive review of the company’s financials and future prospects under the leadership of Derichebourg (EPA:DBG).
Elior Group has shown notable progress in its financial health, particularly in reducing its net debt to EBITDA ratio to 3.8x in the fiscal year 2024 estimate, a significant improvement from levels above 10x in previous years. Additionally, the company’s EBITA margin is expected to improve to 2.8% in the same fiscal year. Deutsche Bank’s analysts are optimistic about the company’s trajectory, anticipating that Elior will achieve its target leverage of less than 3.5x in the fiscal year 2025 estimate ahead of schedule, potentially in the first half of the year.
The latest financial analysis by Deutsche Bank incorporates the integration of Derichebourg Multiservices (DMS) into Elior’s reporting structure and includes revised estimates that slightly lower the company’s revenue and EBITA projections compared to previous Deutsche Bank forecasts. These revisions, which show approximately 1.5% lower revenues and between 3-7% lower EBITA, align with the company’s guidance, which Deutsche Bank suggests is intentionally conservative.
Despite these downward revisions, Deutsche Bank’s projections for Elior’s EBITA and earnings per share (EPS) for the fiscal years 2025 to 2027 remain significantly higher than the consensus estimates. The bank’s analysts seem to have a strong belief in Elior’s potential for continued improvement and financial success under its current leadership and strategic initiatives.
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