Atos: Adjusting our forecasts as we include Syntel in our model
Atos: (BUY, Fair Value EUR157 vs. EUR163 (+58%))Adjusting our forecasts as we include Syntel in our model
We reiterate our Buy rating but adjust our DCF-derived fair value to EUR157 from EUR163 as a consequence of the Syntel acquisition: +EUR19 on raised forecasts over 2018-2020, +EUR7 on raised mid-term adj. EBIT margin to 12.5% from 12%, and -EUR32 as we increase our company beta to 1.05 from 0.93. While we raise our adj. EPS ests. by 4% for 2018 and 15% for 2019-2020, we justify a higher company beta due to integration risks, net debt position, and recent sluggish revenue growth.
Atos is an international information technology services company operating in 52 countries. Co.'s customers are sectors like Public Sector and Utilities, Telecoms and Media, Financial Services, Process Industries and Discrete Manufacturing and Consumer Products and Retail. Co. operates in seven geographical segments: Germany; France; Benelux and The Nordics; U.K. and Ireland; Atos Worldline; Central & Eastern Europe; North America; Iberia; and Other Countries. Co. delivers IT services through the following five segments: Managed Services, Systems Integration, Consulting, Worldline: ePayment Services, and Cloud & Enterprise Software.
Since 1996, Bryan, Garnier & Co has been growing with an absolute conviction that the investment banking landscape would experience a major revolution: most of the large local generalist banking groups will disappear to the benefit of a handful of global powerhouses, and an emerging group of independent, highly specialised boutique investment banks.
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