Recent Expansion of Veolia's Valuation Discount to Suez Is Unjustified
We reiterate our fair value estimates of EUR 21.50 per share for Veolia and EUR 14.90 per share for Suez. We think the former is undervalued while the latter is overvalued. The recent widening of Veolia's valuation discount to Suez is not justified by fundamentals. We think Veolia has the highest upside potential in the short term among the European utilities we cover.Veolia's 13% valuation discount to Suez in terms of 2017 P/E is unjustified, in our view. First, Veolia historically has traded ...
Suez is active in each stage of the water and waste cycles. Co. is organized around three main segments: Water Europe (water distribution and treatment services, particularly under concession contracts, to individuals, local authorities and industrial clients); Waste Europe (waste collection and treatment services for local authorities and industrial clients; these services include collection, sorting, recycling, composting, energy recovery and landfilling for both non-hazardous and hazardous waste) and International (water, waste and engineering services, with a special focus on risk-management resulting from specific local environments by setting up partnerships).
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