VIE FP

Veolia Environnement SA

Industrial/Transportation


Presented:03/21/2024
Price:€29.25
Cap:$23.29B
Current Price:€29.85
Cap:$23.79B

Presented

Date03/21/2024
Price€29.25
Market Cap$23.29B
Ent Value$51.95B
P/E Ratio22.01x
Book Value€12.14
Div Yield3.83%
Shares O/S714.99M
Ave Daily Vol1,588,586
Short IntN/A

Current

Price€29.85
Market Cap$23.79B
Veolia Environnement SA engages in the management of water supplies and distribution systems and provides waste management services. It operates through the following business segments: Water, Environmental Services, and Energy Services. The Water segment integrates drinking water and waste water activities such as water distribution, water and waste water treatment, industrial process water, and manufacture of water treatment equipment and systems. The Environmental Services segment collects, processes, and disposes household, trade, and industrial waste. The Energy Services segment includes heat production and distribution, energy optimization and related services, and electricity production. The company was founded on December 14, 1853 and is headquartered in Paris, France.

Publicly traded companies mentioned herein: Veolia Environnement (VIE FP)

Highlights

The presenter is long shares of Veolia Environnement (VIE FP), which is a leading global environmental services company based in France. His thesis revolves around Veolia’s differentiation, dominant scale, and vertical integration within the water and waste business that accounts for nearly 80% of total EBITDA, believing secular growth will drive multiple expansion from the current 9x his 2027 EPS forecast to a more normal 17.5x valuation by the end of 2026. Additionally, investors seem to underestimate the strategic and financial benefits of Veolia’s 2022 acquisition of its primary competitor Suez, creating synergies potentially 20% higher than management’s €500 million guidance. Considering the underestimated synergies and discounted valuation, he views the risk/reward setup as attractive at the current €30 share price, with his base case suggesting a doubling over 2-3 years and solid downside protection over the same timeframe in a downside scenario. 

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Idea Discussion

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