Veolia Reassuring on H2 outlook (1H26 Conference Call Feedback)

Research evidence excerpt

Veolia Reassuring on H2 outlook (1H26 Conference Call Feedback)

Javier Garrido AC Europe Equity Research

(34-91) 516-1557 30 July 2026 J P M O R G A N

javier.x.garrido@jpmorgan.com

Investment Thesis, Valuation and Risks

Veolia (Neutral; Price Target: €37.90)

Investment Thesis

Veolia’s management has executed on a large restructuring, orienting the company’s culture

toward cost efficiency, profitability and cash flow focus. This should enable Veolia to

materialize synergies from its acquisitions in the coming years, slightly offsetting the impact

of the current environments. However, waste remains cyclically exposed. With a sensitivity

of +/-€30m EBITDA per +/-1% of waste volumes, we believe Veolia could be highly

impacted by a slowdown in the economy. Interventions in Europe have buffered the energy

crisis and the market re-rated materially since. Yet our Equity Strategists believe that the

consensus view of a soft landing with a rapid normalization of inflation may be misplaced,

and the recessionary risk in Europe is not over yet. We rate the stock Neutral.

Valuation

Our DCF-based SOTP is based on WACC calculations for each division or activity cluster

using our proprietary methodology. Given the visibility on the long term targets and the

current macro backdrop, we believe it is appropriate to once again use our SOTP as the basis

for our PT, vs the discount to the historic P/E multiple that we have used in the last couple

of years.

Risks to Rating and Price Target

The main risks to our Neutral rating on the shares are:

To the Upside

• A better-than-expected macroeconomic environment or increasing industrial waste

volumes, recycling prices or water concessions tariffs and margins;

• A better-than-expected margin expansion in the Energy from Waste activity from higher