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On Tuesday, Kepler Cheuvreux analyst Thomas Renaud initiated coverage on Louis Hachette Group (ALHG:FP), issuing a Buy rating with a price target of €1.80. This target suggests a valuation at 13 times the estimated 2025 EV/EBITA (Enterprise Value to Earnings Before Interest, Taxes, and Amortization).
Louis Hachette Group, recently separated from its parent company Vivendi (OTC:VIVHY), holds significant stakes in two major industry players: 66.53% of Lagardère SA and 100% of Prisma Media. This positions the company as the third-largest consumer publisher, accounting for 31% of its revenues, and the third-largest travel retail operator globally, representing 63% of its revenues.
Kepler Cheuvreux forecasts robust financial performance for Louis Hachette Group, predicting compound annual growth rates (CAGRs) for EBITA and free cash flow (FCF) at 7% and 4%, respectively, from 2024 to 2027. The analyst’s optimistic outlook is primarily influenced by what they perceive as a significant holding discount and the potential for near-term events to minimize it.
Two imminent developments could act as catalysts for Louis Hachette Group’s stock value. Firstly, there is the possibility of the company acquiring full ownership of Lagardère in the coming months. This expectation is bolstered by Vivendi’s commitment to purchase approximately 9% of Lagardère’s capital by mid-June 2025, which could result in Vivendi holding a 14% stake.
Secondly, the anticipated sale of the Travel Retail unit, which is considered a non-core yet valuable asset, could accelerate Louis Hachette Group’s transition into a pure media entity. This move would be in line with the broader strategy of the Bolloré Group, a major shareholder in Vivendi.
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