Teleperformance: CAC leader, as analyst wants to believe

(CercleFinance.com) - Teleperformance shares were by far the biggest risers on the CAC 40 index on Thursday morning, buoyed by upbeat comments from analysts at Morgan Stanley, who raised their target price for the stock.


Late morning, the customer experience outsourcing specialist's share was up over 4.4%, while the CAC was just afloat (+0.1%) at the same time.

In a study of the business services sector, Morgan Stanley reports that it has raised its target price for the stock from E147 to E150, while maintaining its 'overweight' recommendation on it.

While we recognize that Teleperformance's long-term prospects remain uncertain due to concerns surrounding the well-identified rise of AI, we believe there are reasons to be more positive in the short term given its re-rating potential, the US bank explains.

According to Morgan Stanley, the inflection point observed in organic growth should be confirmed this year, thanks to the end of the slowdown in the customer service outsourcing segment, which could lead to some positive surprises compared with the consensus.

The New York bank points out that the stock is currently being paid for on the basis of around five times its earnings, a valuation level deemed 'depressed'.

MS also believes that the Group's strong free cash flow could enable it to "significantly" increase shareholder remuneration, assuming no M&A transactions.


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