Stifel reaffirms its 'hold' recommendation on OVHcloud, but lowers its target price from €18 to €11, believing that pricing and cost control need to be improved for the cloud computing service provider.

Rather than struggling to break even at EBIT level, OVH should theoretically show EBIT margins at the top end of the 10-20% range, given its business model', the broker judges.

Stifel nevertheless believes that while outgoing shareholders and eroded confidence should impose a ceiling on the share price, 'the free cash flow yield from the installed base could limit the downside risk'.

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