SW FP

Sodexo

Industrial/Transportation


Presented:07/14/2020
Price:€61.86
Cap:$10.03B
Current Price:€75.55
Cap:$12.34B

Presented

Date07/14/2020
Price€61.86
Market Cap$10.03B
Ent Value$18.26B
P/E Ratio13.29x
Book Value€28.14
Div Yield4.69%
Shares O/S145.63M
Ave Daily Vol453,788
Short IntN/A

Current

Price€75.55
Market Cap$12.34B
Sodexo SA engages in the provision of on-site services, benefits and rewards services, and personal and home care services. It offers integrated solutions which cover a variety of working and living environments and are available in client segments which include corporate, health care, education, defense, remote sites, justice services, seniors, and sports and leisure. Sodexo was founded by Pierre Bellon in 1966 and is headquartered in Issy-les-Moulineaux, France.

Publicly traded companies mentioned herein: Aramark (ARMK), Cintas Corp (CTAS), Compass Group PLC (CPG LN), Sodexo SA (SW FP)

Highlights

The presenter is bearish on the outlook for caterers, which include Aramark (ARMK), Compass Group (CPG LN), Sodexo (SW FP), and Elior Group (ELIOR FP). Over the near term, he expects these businesses to experience short-term revenue declines of as much as 50% – 60% due to the lack of live events with fans (e.g., sports, concerts), and universities shifting to remote semesters. These caterers have fairly high fixed costs related to their kitchens, but can lay off or furlough staff, so he thinks earnings will decline 25% – 30%. Furthermore, he considers the impaired long-term value proposition and margin structure bigger issues and sees 30% – 40% downside to these stocks from current levels.

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Idea Discussion

Commentor 1 - 2 weeks ago

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