Edenred (AO) | Buy | France draft reform largely in line, digital tailwind intact

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Edenred (AO) | Buy | France draft reform largely in line, digital tailwind intact

Edenred Buy | Target Price: EUR28.00

Company description Management

Edenred is the global leader in transactional solutions for companies, Bertrand Dumazy, CEO

employees, and merchants. Whether delivered via card, mobile app, online Virginie Duperat-Vergne, CFO

platform, or paper voucher, all of these solutions mean increased purchasing Cédric Appert, head of IR

power for employees, optimise expense management for companies, and Key shareholders

generate additional business for partner merchants. Edenred mostly operates in Free float 100.00%

LatAm (Brazil and Mexico are key countries) and Europe (France, Italy, Belgium, Capital World Investors 14.60%

Turkey). Select Equity Group 5.10% Capital research global investors 6.70%

Investment case Valuation methodology

The business model has evolved since the current management Our target price is P/E derived, based on a 14x P/E FY27E, in line

joined in 2015, with an improved geographic (reduced exposure with the post-COVID sector average (2022-25). It is equivalent to

to LatAm) and business mix (reduced exposure to the a DCF-derived valuation assuming a 13.5% WACC and a 3% long-

regulation-sensitive meal-voucher segment). term growth rate.

Digitalisation presents a new growth driver, improving Our DCF-based valuation assumes a 13.5% WACC and a 3% long-

penetration, offering access to new features, and making cross- term growth rate. It also includes a long-term EBITDA margin of

selling easier. In our view, it should be an important driver of the 40% and a neutral cash position.

take-up and generates confidence in the group’s capacity to Risks to our rating

sustain solid LFL revenue growth.