Sodexo (ENXTPA:SW) Valuation in Focus After Extended Multi-Country Shell Partnership Renewal

If you have been tracking Sodexo (ENXTPA:SW), the latest buzz comes from its freshly inked five-year extension with Shell. This new agreement spans 41 sites across 19 countries, from corporate HQs to offshore facilities, showing just how embedded Sodexo's workplace services have become in Shell’s day-to-day operations. For investors, the scale and renewal of this partnership underscore Sodexo’s staying power and client trust, especially with major players focused on innovation and sustainability.

The news lands in a year that has been anything but steady for Sodexo’s share price. While the multi-year relationship with Shell hints at deepening roots, Sodexo’s stock has slipped nearly 30% over the past year, despite small recent gains. Momentum appears to be searching for direction, with short-term upticks present, but the bigger picture reflects investor caution, likely tied to sector changes or shifting perceptions of risk.

This brings the classic investor dilemma to the forefront. With a year marked by setbacks but a renewed anchor contract in place, does Sodexo’s current price offer a genuine bargain, or is the market already hard at work pricing in what comes next?

Most Popular Narrative: 21.6% Undervalued

Based on the most widely followed narrative, Sodexo is considered to be significantly undervalued, trading well below its estimated fair value by over 20%.

Sodexo's focus on refining its portfolio mix and accelerating innovation within North America's Education sector is expected to drive improved growth and performance starting in fiscal year '26. This is likely to positively impact future revenue.

Is this the inflection point for Sodexo? There is a detailed roadmap behind this undervaluation, one that models future margin expansion, new business momentum, and a strategic pivot into lucrative sectors. Want to see which future profit benchmarks and bold assumptions could push Sodexo’s shares to a much higher level? The calculations behind this fair value just might surprise you.

Result: Fair Value of €66.65 (UNDERVALUED)

Have a read of the narrative in full and understand what's behind the forecasts.

However, slower-than-expected margin improvement and uncertainty around contract wins could challenge the optimistic outlook. This could potentially derail the current undervaluation narrative.

Find out about the key risks to this Sodexo narrative.

Another View: Our DCF Model Steps In

While the consensus price target suggests Sodexo is undervalued, our SWS DCF model supports this assessment, indicating the stock still trades well below its fair value. However, the question remains whether DCF assumptions can withstand the current uncertainty.

Look into how the SWS DCF model arrives at its fair value.

Simply Wall St performs a discounted cash flow (DCF) on every stock in the world every day (check out Sodexo for example). We show the entire calculation in full. You can track the result in your watchlist or portfolio and be alerted when this changes, or use our stock screener to discover undervalued stocks based on their cash flows. If you save a screener we even alert you when new companies match - so you never miss a potential opportunity.

Build Your Own Sodexo Narrative

If you have a different perspective or want to dig into the numbers on your own terms, crafting a personal narrative takes just a few minutes. Do it your way.

A great starting point for your Sodexo research is our analysis highlighting 3 key rewards and 2 important warning signs that could impact your investment decision.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

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