OVH (AO) | Hold | Q3 preview: turning the corner

研报英文原文证据摘录

OVH (AO) | Hold | Q3 preview: turning the corner

c.38–39%, above the stated guidance range but consistent with the operational narrative.

Our FY26E estimates are as follows. Revenue: EUR1,135.7m, implying +4.7% reported and +6.0% LFL (mid-point of guidance). Adjusted

EBITDA: EUR469.6m, for a margin of 41.4%, above FY25 and above the minimum implied by guidance. Capital expenditure: EUR391.8m,

or 34.5% of revenue. Unlevered free cash flow: EUR76.1m (6.7% margin). Levered free cash flow: -EUR19.7m, expected to turn positive in

FY27. We note the levered FCF remains technically negative at the full-year level in our model despite the guidance for positive; this

reflects the residual dilution of H1 front-loaded capex and the still-elevated lease repayments and financial interest charges (c.EUR96m

combined). The guidance likely refers to a slightly different definition; on the company's preferred unlevered FCF metric, the trajectory is

clearly positive.

Hold, sovereignty premium overdone; structural questions remain

We reiterate our Hold, TP EUR9.50. The stock has re-rated c.17% over the past month, and we see the risk/reward as balanced at best.

Two narratives are driving the move, sovereign cloud speculation and Klaba optimism, neither of which we think justifies a structural re-

rating at this stage.

On sovereignty: OVH's positioning is strategically relevant, and the Dragon LLM lab adds optionality. But the financial materialisation is

slow, data sovereignty ARR remains a low single-digit percentage of group revenue, and sovereign contracts are structurally shared

across multiple European providers. The read-across from peers (Akamai, DigitalOcean, IONOS) confirms robust cloud demand broadly,