Stifel initiates coverage of OVH, a leading European cloud services provider listed on Euronext Paris since October 2021, with a 'hold' recommendation and a price target of 18 euros.

In addition to the market's positive longer-term characteristics, the broker sees 'growth in PaaS and, paradoxically, the inflationary environment as opportunities to improve margins and reduce capital intensity currently weighing on FCF'.

Stifel acknowledges a risk of negative earnings momentum, partly linked to delayed pass-through effects from rising costs, but believes that these pressures on margins would be transitory.

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