Teleperformance: Downside risks to 2026 estimates; reinstate rating at Underweight

Research evidence excerpt

Teleperformance: Downside risks to 2026 estimates; reinstate rating at Underweight

J P M O R G A N Europe Equity Research

15 July 2026

Teleperformance Underweight

TEPRF.PA, TEP FP

Downside risks to 2026 estimates; reinstate rating at Price (15 Jul 26):€55.20

Underweight Price Target (Dec-27):€44.00

Teleperformance has been a business in transition ever since the emergence of European Business Services

ACgenerative AI in 2022, with the company increasingly catering to a “premium” Victoria K Chang

human agent CX market alongside growing its integrated AI/support services. (44-20) 7134-5439

While progress has been made in terms of refocusing on new growth areas and victoria.kx.chang@jpmorgan.com

building out AI capabilities, we remain cautious on the extent these services can J.P. Morgan Securities plc

offset the ongoing pressure seen in the business. As TP continues to transition, we Jane L Sparrow

also see risks of higher opex/capex and restructuring costs in 2026 and beyond, (44-20) 3493-7101

jane.sparrow@jpmorgan.com

relating to AI spend and workforce reduction that could weigh on margins and FCF J.P. Morgan Securities plc

generation. As a result, despite meaningful consensus downgrades seen already,

Ankit Khandelwal

we view there is further downside to 2026 BBG consensus expectations; we are (91-22) 6157-5167

-2% below on op. EBITA and -12% below on FCF. Our PT of EUR44 implies 20% ankit.khandelwal@jpmchase.com

downside from here, with our DCF model baking in LSD FCF decline between J.P. Morgan India Private Limited

2026-30E, -5% in 2030-35E and 0% terminal growth. Key focus on FCF: TP

trades on an attractive ~9% 2026 dividend yield, providing some support to its

Key Changes (FYE Dec)share price. Given TP’s strong cash conversion characteristics, we think the