Edenred stock soars 10% after Q3 revenue beat and full-year outlook reaffirmed

Investing.com -- Shares of Edenred SA (EPA:EDEN) jumped more than 10% on Tuesday after the French payments group reported third-quarter revenue slightly ahead of expectations and confirmed its full-year outlook.

Operating revenue increased 8% year over year on a like-for-like basis to €667 million, exceeding company consensus by 2%. 

Total revenue reached €726 million, up 7.3% like-for-like and 3% above analyst forecasts. 

Jefferies described the quarter as “a small beat” driven by continued strength in Mobility and Benefits & Engagement, which offset weakness in Complementary Solutions.

Mobility revenue climbed 14% like-for-like to €179 million, aided by double-digit growth in Latin America’s Beyond Fuel services, covering maintenance, tolls and freight management, and improving activity in Europe, where higher kilometers driven and VAT refunds supported results. 

Benefits & Engagement rose 9% to €426 million on steady performance in Latin America, Germany and Southern Europe. 

Complementary Solutions declined 7% to €62 million, affected by reduced business-to-consumer and payment service activity in Chile and lower corporate spending, which offset gains in the United Arab Emirates through C3Pay.

Other revenue fell 2% like-for-like to €59 million but came in 9% above expectations, reflecting divergent interest rate trends, with higher rates in Brazil and lower in the euro area. 

“FX headwinds were stronger than anticipated,” the brokerage noted, citing a €22 million negative foreign exchange impact and €16 million positive scope effect.

Geographically, France posted a 2% rise in operating revenue to €81 million, accounting for 12% of total revenue, supported by stronger demand for electric vehicle charging. 

Europe excluding France grew 5%, showing no material effect from Italy’s commission cap on Benefits & Engagement. 

Latin America advanced 12%, led by a 15% increase in Brazil and 6% growth in Hispanic markets, while the rest of the world gained 16%.

Edenred reaffirmed its full-year guidance for EBITDA growth above 10% on a like-for-like basis, maintaining its projection of roughly €1.34 billion. 

The company raised its outlook for other revenue to more than €220 million, up from over €210 million previously. “ we believe Edenred is on track to meet or exceed its >10% EBITDA LFL growth target,” Jefferies analysts Hannes Leitner and Charles Brennan said, adding that the company would need to grow fourth-quarter revenue by about 1% to achieve the goal.

Jefferies kept a “hold” rating on the stock with a price target of €22.20, implying 7% potential upside from the prior closing price of €20.83. 

The brokerage cited recent share weakness but said the quarterly performance and confirmed guidance supported the company’s near-term outlook.

Edenred’s market capitalization was €5 billion, with shares trading between €34.93 and €19.70 over the past 52 weeks. 

The company operates in 45 countries, with major markets in France, Brazil and Italy, offering payment solutions across Benefits & Engagement, Mobility and Complementary Services segments.