Elior: Berenberg reduces target price
(CercleFinance.com) - On Tuesday Berenberg slashed its target price for Elior shares from 6.
5 euros to four euros, while maintaining its buy rating on the share.
In its morning comments, the broker says that the collective catering group's share has navigated 12 chaotic months, with it still down 55% relative to October 2021, despite the share's recent rebound.
Berenberg attributes this underperformance to concerns about the company's low profit margins, a disappointing customer retention rate, management changes and the possibility of an upcoming fundraising.
Add to this the arrival of Derichebourg as the group's largest shareholder, and Berenberg says it does not expect the volatility in the shares to abate any time soon.
While it could be easy to throw in the towel, after analysts reduced their estimates, they are nevertheless sticking to a buy rating on the stock, albeit with a lower target price, they concluded.
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