Teleperformance: share price up, a broker's analysis
November 07, 2023 at 09:10 pm IST
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Teleperformance gains nearly 3% in Paris, after last night's publication of sales of 1989 ME (-3.3% on a reported basis), a figure slightly below expectations (Oddo had forecast sales of 2054 ME; the consensus was 2056 ME). On a like-for-like basis, sales rose by +3.1%.
Against this backdrop, Oddo BHF this morning maintained its 'outperform' rating on Teleperformance shares, with an unchanged target price of 238 euros.
The broker points out that Teleperformance's management is now targeting organic growth of around 6% excluding COVID at constant exchange rates (which is already in line with Oddo BHF's expectations), compared with between 6% and 8% in the previous estimate. However, the 2023 EBITA target remains unchanged at around 16%.
The analyst considers the quarterly performance to be 'mixed', and believes that it seems to represent a low point, with Q4 likely to be a little better oriented.
Organic growth in 2024 nevertheless remains uncertain, so that the Group's revaluation should be a medium-term process", concludes the broker, before adding that Teleperformance remains an undeniable "Value" profile, with a valuation of 6.7x EV/EBITA 2024.
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Teleperformance SE is no. 1 worldwide in outsourcing and corporate consulting services for customer relation management. Net sales break down by activity as follows:
- customer experience management services (83.7%): customer information, technical assistance, customer acquisition, back-office services. The group also offers integrated services for business process management and digital transformation and high added value consulting services. Net sales are distributed by geographic region between Europe/Middle East/Africa (36.3%), North America and Asia/Pacific (36.3%), Latin America (22.5%) and other (4.9%);
- specialized services (16.3%): online interpreting, visa application management and debt collection.
At the end of 2023, the group had over 490,000 employees in 99 countries and offers its services in over 300 languages across over 170 markets.
Net sales by customer sector break down into healthcare (56%), government services (13%), insurance (10%), financial services (7%) and other (14%).