Nucor earnings beat by $0.08, revenue fell short of estimates
On Wednesday, Edenred (EPA:EDEN:FP) (OTC: EDNMY) saw a change in stock rating as Jefferies analyst Hannes Leitner upgraded the company from Underperform to Hold. The analyst has also adjusted the price target to €25.60, down from the previous €31.80.
The revision comes after Edenred experienced a slowdown in the third quarter across various segments and regions, particularly noting a cautious stance regarding the macro environment in Europe, which accounts for approximately 60% of the company's revenues. The analyst pointed out the challenges in topline dynamics and the limited potential for margin expansion.
Despite these concerns, the current market valuation of Edenred's shares appears to have factored in the negative outlook, including potential regulatory changes in Italy and Brazil that could impact the company. This reassessment by Jefferies suggests that the recent de-rating of Edenred's stock has sufficiently priced in these risks.
Jefferies has also highlighted that their forecasts for Edenred's EBITDA are 11% and 20% below the consensus estimates for the fiscal years 2025 and 2026, respectively. This indicates a more conservative expectation of the company's earnings before interest, taxes, depreciation, and amortization for the upcoming years.
The upgrade to Hold reflects a neutral stance on Edenred's stock, suggesting that while the firm acknowledges the company's current challenges, it also recognizes that the negative factors may already be reflected in the stock's current trading price.
InvestingPro Insights
Recent InvestingPro data provides additional context to Jefferies' analysis of Edenred. The company's revenue growth of 17.2% over the last twelve months aligns with the analyst's observation of a slowdown, as this figure suggests previous quarters may have seen stronger growth. Additionally, the stock's recent performance supports the cautious outlook, with InvestingPro data showing a 25% decline over the past three months and a 40.46% drop over six months.
InvestingPro Tips highlight that Edenred is "Trading near 52-week low" and has "maintained dividend payments for 14 consecutive years." These insights complement Jefferies' view that the stock's current valuation may have priced in negative factors. The consistent dividend history could provide some stability for investors during this period of uncertainty.
For readers seeking a more comprehensive analysis, InvestingPro offers 7 additional tips for Edenred, which could provide further insights into the company's financial health and market position.
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