Edenred: leads the CAC, with Morgan Stanley optimistic

(CercleFinance.com) - On Thursday, Edenred shares led the CAC 40 index on the Paris Bourse, buoyed by Morgan Stanley's upbeat comments.


At around noon, the stock was up over 3%, while the CAC 40 was down by around 0.5%.

In a sector report, Morgan Stanley says it has upgraded the stock from 'equal weight' to 'overweight', albeit with a target price reduced from E55 to E51.

The analyst highlights the French group's resilient business model and solid growth opportunities, which he believes more than compensate for the uncertainty linked to regulatory developments.

He also underpins his optimism with the prospect of the prepaid services specialist redistributing almost 40% of its market capitalisation to its shareholders by 2026, in both dividends and share buybacks.

After losing 31% this year, Edenred - which is worth E9.4bn - is trading at 15x its expected earnings for the next twelve months (P/E), compared with an average of 26x over the last ten years, the broker notes.


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