Update shared on 05 Nov 2025
Fair value Decreased 7.44%Analysts have revised Sodexo's average price target downward, decreasing it by approximately EUR 5 to EUR 59. This reflects a more cautious outlook based on updated profitability and growth expectations.
Analyst Commentary
Recent analyst updates provide insights into both the cautious and constructive perspectives surrounding Sodexo's outlook and valuation.
Bullish Takeaways
- Bullish analysts note that the business maintains a stable market position, which supports downside protection for the valuation.
- Defensive attributes and strong cash flow generation remain appealing in the current economic landscape.
- Execution on cost controls and ongoing efficiency measures is expected to support margins, helping to offset some of the headwinds to growth.
Bearish Takeaways
- Bearish analysts are concerned that revised price targets reflect tempered growth expectations and the potential for earnings volatility.
- Slower recovery in key end markets may weigh on near-term revenue and margin expansion.
- Uncertainty about the pace of operational improvements relative to prior expectations could challenge further upside to the stock.
What's in the News
- The Sodexo Board of Directors appointed Thierry Delaporte as Group Chief Executive Officer, effective November 10, 2025, succeeding Sophie Bellon. (Key Developments)
- Sodexo S.A. provided earnings guidance for 2026 and expects organic revenue growth of +1.5% to +2.5%, with at least +2% contributed by pricing. (Key Developments)
- A proposed dividend of EUR 2.70 was announced, representing an increase of 1.9% from the previous year and maintaining a 50% pay-out ratio. This proposal is subject to approval at the December 2025 Shareholders Meeting. (Key Developments)
- Sodexo plans to pursue selective mid-sized bolt-on acquisitions and to allocate around EUR 300 million per year, focusing on food services and further expansion in key markets such as Spain. (Key Developments)
- Sodexo and Shell renewed a five-year collaboration to operate workplace services across 41 sites in 19 countries, with the aim of enhancing service quality and digital capabilities. (Key Developments)
Valuation Changes
- Fair Value Estimate, based on analyst models, has decreased from €63.73 to €58.99.
- Discount Rate has declined marginally from 9.75% to 9.69%.
- Revenue Growth Projections have increased slightly, from 2.13% to 2.18%.
- Net Profit Margin Forecast has fallen from 3.16% to 2.94%.
- Future Price-to-Earnings (P/E) Ratio has eased from 15.13x to 14.83x.
Disclaimer
AnalystConsensusTarget is a tool utilizing a Large Language Model (LLM) that ingests data on consensus price targets, forecasted revenue and earnings figures, as well as the transcripts of earnings calls to produce qualitative analysis. The narratives produced by AnalystConsensusTarget are general in nature and are based solely on analyst data and publicly-available material published by the respective companies. These scenarios are not indicative of the company's future performance and are exploratory in nature. Simply Wall St has no position in the company(s) mentioned. Simply Wall St may provide the securities issuer or related entities with website advertising services for a fee, on an arm's length basis. These relationships have no impact on the way we conduct our business, the content we host, or how our content is served to users. The price targets and estimates used are consensus data, and do not constitute a recommendation to buy or sell any stock, and they do not take account of your objectives, or your financial situation. Note that AnalystConsensusTarget's analysis may not factor in the latest price-sensitive company announcements or qualitative material.