Morningstar | EDEN Updated Forecasts and Estimates from 29 Nov 2018
Wide-moat Edenred produced a solid third-quarter update with like-for-like revenue up 13% and almost 5% adjusting for currency impacts. Operating revenue growth, which excludes interest income from client cash on hand, grew even faster at 14.6%. While normally such numbers would be met with much enthusiasm from the market, blowout results earlier this year and the subsequent pop in the share price have raised expectations considerably. We do not expect to make any material changes to our forecasts on the back of these numbers, and we reiterate our EUR 22.50 fair value estimate. We believe the shares are currently overvalued.Divisionally, the expansion into fleet and mobility solutions continues to gather pace, with the business growing organically by 17% year to date, ahead of the rest of the business. Geographically, there was a departure from the normal pattern of growth, with Europe excluding France leading the way, growing at more than 20% organically year to date. This ties in with the expansion of Edenred’s fuel card business into Eastern Europe, as the company has been highly active in acquiring peers and companies in peripheral sectors such as toll roads. These acquisitions serve to consolidate its position in the region, as well as augmenting its client offering. This business now generates 26% of group revenue and provides a significant hedge from the company’s primary ticket restaurant business.
Edenred designs and delivers services to clients, companies or public sectors, enabling them to offer beneficiaries additional purpose-directed purchasing power, such as the Ticket Restaurant® meal voucher, and provides prepaid corporate services. Co.'s product offering ensures that allocated funds are used as intended, allowing its clients to manage: Employee benefits (Ticket Restaurant®, Ticket Alimentacion®, Ticket CESU, Childcare Vouchers®, etc.); Expense management process (Ticket Car®, Ticket Clean way®, Repom®, etc.); and Incentive and rewards programs (Ticket Compliments®, Ticket Kadeos®, etc.). Co. also supports public institutions in managing their social benefits programs.
Morningstar, Inc. is a leading provider of independent investment research in North America, Europe, Australia, and Asia. The company offer an extensive line of products and services for individual investors, financial advisors, asset managers, and retirement plan providers and sponsors.
Morningstar provides data on approximately 530,000 investment offerings, including stocks, mutual funds, and similar vehicles, along with real-time global market data on more than 18 million equities, indexes, futures, options, commodities, and precious metals, in addition to foreign exchange and Treasury markets. Morningstar also offers investment management services through its investment advisory subsidiaries and had approximately $185 billion in assets under advisement and management as of June 30, 2016.
We have operations in 27 countries.
Unfortunately, this report is not available for the investor type or country you selected.
Browse all ResearchPool reportsReport is subscription only.
Thank you, your report is ready.
Thank you, your report is ready.