TELEPERFORMANCE : Stifel raises its buy recommendation
January 19, 2024 at 10:01 am
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Stifel announced on Friday that it had raised its recommendation on Teleperformance shares from 'hold' to 'buy', believing that the customer experience outsourcing specialist was on the cusp of a 'new beginning'.
In a note released this morning, the research firm, which explained that it had raised its earnings forecasts for the group following the acquisition of Majorel, said it expected fiscal 2024 to mark an "inflexion" after the difficulties encountered last year.
The analysts thus anticipated a gradual improvement in sales growth, with the maintenance of a "solid" performance in terms of profit margins.
'Furthermore, we consider the current valuation of the stock to be attractive, insofar as it does not represent the company's solid fundamentals or its status as a leader within the sector, while incorporating an excessively negative scenario regarding the implications of AI', he adds.
While acknowledging that the stock could prove volatile in the short term, Stifel sees an attractive risk/return profile in the prospect of a revaluation that could, in his view, extend over several years and lead the share price to more than double in three years.
His price target has thus been raised from 170 to 200 euros.
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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%).