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Investing.com - Morgan Stanley downgraded Veolia Environnement SA (EPA:VIE) (OTC:VEOEY), a $23.6 billion market cap utility company with a 3.54% dividend yield, from Overweight to Equalweight on Wednesday, while reducing its price target to EUR32.00 from EUR36.00. According to InvestingPro analysis, the stock appears slightly undervalued based on its Fair Value estimates.
The downgrade reflects Morgan Stanley’s view that Veolia lacks major strategic updates until 2027-28, with only regular thematic deep dives expected in the near term. The investment bank noted that historically, such events have not triggered significant stock re-ratings. Despite this outlook, InvestingPro data shows the company has maintained dividend payments for 25 consecutive years, demonstrating consistent shareholder returns.
Morgan Stanley also cited potential sustained political uncertainty in France as a temporary obstacle to stock appreciation, though it expects limited direct implications for Veolia’s business operations.
The research firm indicated it sees better opportunities elsewhere in the sector, with other companies offering more immediate re-rating potential or earnings per share upgrade catalysts.
Veolia Environnement, a global leader in water and waste management services, will continue to be monitored by Morgan Stanley with the revised Equalweight rating and EUR32.00 price target.
In other recent news, Veolia has entered into a strategic partnership with the Agence Française de Développement (AFD). This three-year agreement aims to advance environmental services and sustainable development initiatives in various developing regions. The collaboration will focus on areas such as Latin America, Central Asia, the Balkans, Africa, and the Middle East. By combining Veolia’s technical expertise with AFD’s implementation capacity, the partnership seeks to address pressing environmental challenges. This development highlights Veolia’s commitment to ecological transformation and sustainable growth on a global scale.
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