Bernstein initiates Clariane at “outperform” after €1.5 bln recovery plan

Published 16/07/2025, 14:02
© Reuters

Investing.com -- Bernstein has initiated coverage on Clariane (F:KORI) with an “outperform” rating and a price target of €6.80 per share, implying a 33% upside from its €5.13 closing price on July 14, in a note dated Wednesday. 

The rating follows Clariane’s completion of a €1.5 billion balance sheet reinforcement plan and a return to credit markets after years of sector-wide financial and reputational stress.

The five-year period leading up to the coverage saw multiple shocks across the dependent care sector, including the COVID-19 pandemic, inflationary pressures, a real estate downturn driven by interest rate hikes, and fallout from the Orpea (EPA:EMEIS) scandal. 

Clariane, which operates long-term care, specialty clinics, and assisted living services across six European countries, avoided equity-dilutive debt restructuring and stabilized its financial position through a combination of asset sales and capital raises.

It included €1 billion in asset disposals, including the sale of the Petit Fils network in June 2025 for €345 million, €329 million in equity raised in 2024, and the setting up of real estate debt partnerships. 

By the end of 2025, Clariane’s net debt-to-EBITDA ratio is expected to fall to 2.7x, below its 3.0x target and down from 4.1x at the end of 2023. 

This improved leverage position enabled a €400 million bond issuance on June 24, signaling restored access to credit.

Financial guidance reflects measured optimism. Revenues are forecast to grow from €5.28 billion in 2024 to €5.74 billion in 2026, representing a 4.2% CAGR. 

EBITDA is expected to increase from €1.07 billion to €1.20 billion, with adjusted earnings per share moving from a loss of €0.12 in 2024 to €0.35 by 2026. 

Clariane’s 2026e EV/EBITDA is projected at 8.05x, above the sector median of 7.4x but in line with its five-year average of 8.5x.

Despite demographic headwinds in the short term, the company reported a like-for-like revenue CAGR of 6.7% from 2020 to 2024 and targets 5% growth in 2025. 

Bernstein models over 4% annual top-line growth through 2029, accelerating from 2030 as the over-85 age cohort expands.

The price target is derived from an equal-weighted blend of discounted cash flow and OpCo-PropCo sum-of-parts valuation, with the latter assigning value separately to operations and real estate holdings. 

A blue-sky scenario with normalized capitalisation rates could imply a share value of up to €8.65.

France accounts for 49% of Clariane’s revenue, with solid occupancy rates exceeding 90% in all geographies and EBITDAR margins ranging from 18.9% to 25.2%. 

CEO Sophie Boissard has led the company since 2016, providing management continuity through recent challenges.

Latest comments

Risk Disclosure: Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers
© 2007-2025 - Fusion Media Limited. All Rights Reserved.