Sodexo (EXHO.PA): Ambitious 2030 goals. FY27 EBIT guide -8% vs. consensus reflecting investments. We estimate new contract worth >0.6% sales.

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Sodexo (EXHO.PA): Ambitious 2030 goals. FY27 EBIT guide -8% vs. consensus reflecting investments. We estimate new contract worth >0.6% sales.

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16 Jul 2026 02:32:02 ET │ 14 pages

Sodexo (EXHO.PA)

Ambitious 2030 goals. FY27 EBIT guide -8% vs. consensus reflecting

investments. We estimate new contract worth >0.6% sales.

CITI'S TAKE Neutral / High Risk

Catalyst Watch: Downside, expires 12-AUG-26

Ahead of today's CMD, Sodexo announced 1) mid-term 2030 financial

Price (15 Jul 26 17:30) €52.70 targets that are broadly as we expected (Figure 1) including the step-up in

Target price €55.00 CapEx, but slightly more ambitious margins >5% which on our BRS

adjusted estimates is back to 2017 peak margin (FY25 4.7%), and removal Expected share price return 4.4%

of the leverage target, 2) opex investments of c.€100m p.a. and c.€1bn Expected dividend yield 3.2%

non-recurring investments across 'tech, procurement and organizational Expected total return 7.6%

transformation' - a drag on FY26-28 cash flow generation, 3) FY27E EBIT Market Cap €7,771M

guidance 8% below (Figure 2) consensus estimates driven by incremental US$8,887M

margin pressure driven by opex investments and 4) a new food service

contract with Meta which we estimate is worth >€150m revenue p.a.

(0.6% FY27 sales, albeit with wide estimation uncertainty).

Leo CarringtonAC

Implications - Ambitious 2030 targets evidently suggest significant upside to long- +44-20-7986-0811

leo.carrington@citi.comterm consensus estimates, however with the scale of the recurring and one-off

investments pointing to major organizational change, and FY27 targets 8% below Ajay Nandal

consensus expectations, given the strong run that the stock has had, we expect +91-22-4277-5017

underperformance today. ajay.nandal@citi.com