Edenred: Deutsche Bank reduces its target, but remains Buy

(CercleFinance.com) - On Tuesday, Deutsche Bank cut its target price for Edenred from ?69 to ?68, while renewing its buy recommendation on the meal voucher specialist.


In a research note, the analyst highlights the market's low penetration rate (< 25%), but stresses the positive impact of digitalization, which it believes should accelerate both growth and profitability.

The intermediary points out that Edenred and Pluxee, the two world leaders in the sector, should thus benefit from double-digit structural growth in sales.

In terms of profitability, Edenred has a clear lead with an operating margin of 43.5%, compared with 34.5% for Pluxee, a difference it explains by the size of the company, two and a half times larger than its rival.

This gap is set to widen further, according to DB, which sees Edenred's margin improving by 12% in organic terms each year, while Pluxee's should reach 37% within two years.

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