Sodexo
Note: This is a daily stock update and the information stands true as of 10/04/26, 09:00 CET
Company Update:
H1 26 (ending in February 2026) results
* Revenue €12.02bn, slightly below the consensus
* Underlying operating profit €442m, 19% below the consensus
FY26 outlook
* Organic growth to be 0.5-1.0%, saw 1.5-2.5%
* Underlying operating margin to be 3.2-3.4%, saw slightly below 4.7%
The CEO noted operational challenges and underperformance relative to peers. A portfolio review is currently underway, with a new strategic plan scheduled for release in July.
Impact
We expect a 28% cut to our FY26 underlying operating profit (€1,080m) and a 56% cut to our bottom line (€540m). We may also downgrade our FY27 estimates and the recommendation on the name.
Expert Opinion:
We knew that the situation in the US was difficult, hence the appointment of the new CEO. While it is customary for a new CEO to reset expectations (aka kitchen-sinking), the extent of the reset is substantial, and we will cut our numbers very substantially for 2026 (August) and likely for 2027, and so will the street. The new CEO will unveil his strategic plan in early July.
We think this could be a catalyst that proves interesting. The share price already took a substantial hit, but we expect the stock will drop nonetheless. We would buy below the EUR40 mark to play better news going forward with the strategic/ restructuring plan.
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