Worldline: Invest Securities downgrades to sell.

(CercleFinance.com) - Analysts at Invest Securities were hardly excited by Worldline's investor day yesterday.


From a previous neutral rating on the stock, the Paris broker now recommends investors sell it, even though they have inched up their target price from 33 euros to 34 euros.

Admittedly, analysts acknowledge, that to date management has perfectly executed the integration strategy of Equens and small acquisitions, which explains the improvement in the group's profitability in 2016-2017 and validates the group's targets for 2019. Furthermore, Invest Securities believes that, over this horizon, management's targets are credible.

However, although the broker does not disagree with the group's targets for 2019, it believes that the stock's current valuation already includes future structuring acquisitions that should enable the group's EBITDA margin to easily exceed the 23% that is expected in 2019. This is a particularly optimistic scenario in the broker's opinion, in light of competition in the sector, it laments in the report.

Invest Securities estimates that Worldline is already trading at a 2018 P/E of 27.1x, before 23.5x in 2019, representing EV/EBITA multiples of respectively 18.1x and 15.3x.



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