Oddo BHF confirms its 'outperform' rating on Sodexo shares, with a price target reduced from 118 to 113 euros, believing that the Pluxee spin-off (scheduled for 2024) and its rapid rerating offer powerful catalysts for the share price.

While Sodexo will publish its FY 23 results on 26/10 before trading, the analyst anticipates 'another year of strong post-pandemic growth'.

'We expect 2023e sales of 23,845 ME (consensus 23,723 ME), up 12.9% on a reported basis, of which 11.3% organic (consensus 11.5%), suggesting +8.3%e in Q4', says Oddo BHF.

Sodexo is also expected to communicate differentiated 2024 guidance for OSS and Pluxee. At this stage, Oddo BHF expects organic growth of 7.7% for Sodexo over 2024e (consensus 6.3%), including +7.5% for OSS and +12.0% for Pluxee, and an EBIT margin of 5.8% (consensus 5.8%), including 5.0% for OSS and 32.8% for Pluxee.

In addition to the catalyst linked to the Pluxee spin-off, which should drive the share's rerating over the coming months, we appreciate Sodexo's defensive profile in the current context, as 55% of its sales are generated in sectors that are not dependent on the macroeconomic context (healthcare, education, etc.)", concludes the broker, who adds that he is "broadly in line with consensus over 2023e, but 3% above on average over 2024e.

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