Veolia (VIE.PA): Steady progress. Renewing rating with Neutral

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Veolia (VIE.PA): Steady progress. Renewing rating with Neutral

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21 Jul 2026 00:00:52 ET │ 17 pages

Veolia (VIE.PA)

Steady progress. Renewing rating with Neutral

CITI'S TAKE

We renew our rating of Veolia following a period of Rating Suspended with a

Neutral rating, reflecting a balanced risk/reward outlook. Veolia

management’s delivery of its GreenUp plan has increased operational Neutral from Rating Suspended

resilience, supported by long-term & c.70% inflation-indexed contracts Price (20 Jul 26 17:30) €37.18

across diversified geographies and activities. Veolia shares have re-rated

Target price €37.50strongly YTD compared to its peers, with implied peer group discount at its

historical low. Veolia’s target LFL EBITDA growth of 5-6% appears from -

achievable through the remainder of the plan, supported by the acquisition Expected share price return 0.9%

of Clean Earth. However, all of this appears to be factored within consensus,

Expected dividend yield 5.1%and we see little scope for acceleration in organic growth or announcement

of any new targets in the short-term, making material earnings surprise Expected total return 6.0%

unlikely. We view the shares as fairly-valued. Our target price is €37.5/share. Market Cap €27,606M

US$31,572M

Discount vs peer group narrowing — Veolia has historically traded at a 30-50%

discount to peers on our market multiples-based SOTP. This discount has narrowed

materially YTD to c.14% (vs long-term average of 33%), driven mostly by VIE’s re-

rating with the shares up 26% YTD, compared to -3% for the implied market-based

peer valuation (Figure 2). We believe this is partially driven by VIE’s continued Price Performance

delivery of efficiencies at-or-above target for the last 9 quarters. This, along with (RIC: VIE.PA, BB: VIE FP)