Stifel maintains its 'sell' recommendation on Elior, with an unchanged target price of 1.9 euros.

As a reminder, Elior reported organic growth of 11.2% for fiscal 2023 (consensus was 10.7%, Stifel 11.6%).

Adjusted EBIT (59 ME) came in 18% above expectations (50 ME), despite a weaker-than-expected FCF in the 2nd half, at -84 ME, versus -11 ME anticipated by Stifel.

For 2024, Elior is targeting sales growth of 4 to 5%, compared with the consensus of 5.9% and Stifel's 6%. Elior is targeting an adjusted EBIT margin of 2.5%, in line with the consensus, while Stifel is at 1.8%.

The analyst believes that the outlook for fiscal 2024 is 'slightly below expectations at sales level, but broadly in line at margin level, with an expected improvement supported by an easing of inflationary pressure.'

'Although we regard the sales guidance as conservative, we perceive the margin target as ambitious at this stage, although it could be achieved if the deceleration in inflation continues over the coming months' the broker judges.

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