EDENRED

EDEN
Real-time Euronext Paris - 05/26 02:37:39 pm
39.03EUR
+4.75%

Edenred : The downward trend should continue

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Patrick Rejaunier
Equity Analyst

Strategy published on : 05/20/2020 | 05:08

short sell
Stop-loss triggered

Entry price : 34.9€
Target : 31.81€
Stop-loss : 35.84€
Potential : 8.85%

The declining trend in the stock price that has been seen for a number of trading sessions, should not be expected to reach a turning point over the coming days.
Investors should open a short trade and target the € 31.81.

Strengths

● Graphically speaking, the timing seems perfect for purchasing the stock close to the EUR 31.81 support.

● The group's activity appears highly profitable thanks to its outperforming net margins.

● Historically, the company has been releasing figures that are above expectations.


Weaknesses

● The company is in debt and has limited leeway for investment

● The company's "enterprise value to sales" ratio is among the highest in the world.

● With a 2020 P/E ratio at 31.57 times the estimated earnings, the company operates at rather significant levels of earnings multiples.

● The sales outlook for the group was lowered in the last twelve months. This change in forecast points out a decline in activity as well as pessimistic analyses of the company.

● For the last twelve months, sales expectations have been significantly downgraded, which means that less important sales volumes are expected for the current fiscal year over the previous period.

● For the last few months, analysts have been revising downwards their earnings forecast.

● The technical configuration over the long term remains negative on the weekly chart below the resistance level at 40.5 EUR

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