Veolia: Growth momentum remains even more solid than our initial expectations
Veolia: (BUY, Fair Value EUR22,5 vs. EUR22 (+13%))Growth momentum remains even more solid than our initial expectations
Following a strong Q1, we confirmed this morning our Buy recommendation on Veolia with a FV slightly increased to EUR22.5/share. Top-line growth momentum remains solid (5.4% organic growth in Q1-2018) while EBITDA growth should progressively catch-up during the rest of the year. All in all, our EPS estimates have been increased by c. 1.2% on average over 2018e-2020e. Veolia’s 12-month forward P/E still trades at c. 15% discount vs. its 5-year historical average while 1/top-line growth momentum have never been that strong since end-2010-early-2011; 2/despite a slight slowdown in the past few months, the macro remains supportive and 3/the group’s balance sheet remains sound.
Veolia Environnement provides environmental management services to public authorities, industrial and commercial services customers, and individuals worldwide. These services include the supply of water, the treatment and recovery of municipal or industrial effluent, waste collection, processing and recycling, the supply of heating and cooling services and the optimization of industrial processes. Co.'s business operations are conducted through three divisions, each specializing in a single business sector: Veolia Eau (Water), Veolia Energie (Dalkia, Energy Services) and Veolia Proprete (Environmental Services).
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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