On Tuesday, Deutsche Bank (ETR:DBKGn) updated its outlook on Sodexo (EPA:EXHO) (SW:FP) (OTC: SDXAY) shares, raising the price target to EUR96.00 from the previous EUR88.00.
The firm maintained a Buy rating on the company's stock. The adjustment follows a revision of the bank's model for Sodexo, which now includes updated foreign exchange rates, margin assumptions, and tax levels.
The bank's revised earnings per share (EPS) estimates for Sodexo are now 1.9% to 7.5% higher than initial calculations and are also slightly above the consensus expectations.
The analyst at Deutsche Bank expressed confidence in Sodexo's ability to fine-tune its full-year 2024 earnings guidance to the higher end of the current +30 to +40 basis points of the adjusted EBIT guidance.
The updated guidance is anticipated to be clarified on July 2, coinciding with the company's publication of its Q3 revenues. Deutsche Bank's report also noted that the Bloomberg FY26e consensus may not be fully indicative of Sodexo's performance, as it lacks sufficient analyst coverage with updated expectations.
InvestingPro Insights
With Deutsche Bank's optimistic outlook on Sodexo, investors may find additional context in the latest metrics and analysis from InvestingPro. Sodexo's market capitalization stands at $13.73 billion, reflecting its substantial presence in the market. Despite concerns over weak gross profit margins, as highlighted by one of the InvestingPro Tips, the company has shown a revenue growth of 7.3% over the last twelve months as of Q2 2024. This growth is complemented by a 19.35% strong return over the last three months, indicating a positive trend in the company's stock performance.
InvestingPro Tips also reveal Sodexo's long-standing reliability in dividend payments, with a history of 22 consecutive years of dividends, and a current dividend yield of 2.63%. This could be a reassuring factor for income-focused investors. Moreover, analysts predict profitability for the current year, which aligns with Deutsche Bank's revised EPS estimates that are above consensus expectations. For those interested in further insights and a comprehensive analysis, there are additional InvestingPro Tips available for Sodexo at https://www.investing.com/pro/SDXAY. Use coupon code PRONEWS24 to get an additional 10% off a yearly or biyearly Pro and Pro+ subscription, offering a deeper dive into Sodexo's financial health and future prospects.
This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.