Elis: 1H26 results in-line, FY26 guidance reiterated

Research evidence excerpt

Elis: 1H26 results in-line, FY26 guidance reiterated

Jane L Sparrow AC Europe Equity Research

(44-20) 3493-7101 29 July 2026 J P M O R G A N

jane.sparrow@jpmorgan.com

Investment Thesis, Valuation and Risks

Elis (Overweight; Price Target: €28.30)

Investment Thesis

Elis is a leading provider of textile rental, laundry, hygiene and facility services, primarily

operating in Europe and Latin America, and generates a majority of revenues from countries

where it is the local leader. With the shares now trading at a c.25% discount versus pre-

COVID levels and at a >60% discount to US peer Cintas vs. 17% historically despite, in our

view: (a) encouraging momentum to capture further volume growth - in particular, SMEs,

Workwear and HWB; (b) an improving margin outlook driven by less mature markets

catching up as they scale, although the near-term margin is likely to be pressured by a

strategy of balancing volume growth and client retention; (c) a more resilient balance sheet

that could drive further upside to our EPS forecasts; and (d) a set of solid financials vs US

peers albeit less exposure to Workwear, which is structurally more attractive - we believe

the risk/reward is attractive.

Valuation

We value Elis using a DCF model which includes €150m pa of bolt-on M&A spend, an 8.5%

WACC and a terminal growth rate of 1.5%.

Source: J.P. Morgan estimates

Risks to Rating and Price Target

Downside risks include: significant economic downturn, gas supply concerns, inability to

pass through cost inflation leading to margin declines, market share losses and/or high churn

rates, additional pricing pressures in fragmented markets such as the UK and Germany,

refinancing headwinds, and increasingly professionalised client procurement leading to

higher customer bargaining power.