Sodexo's Hold Rating Kept as Berenberg Notes 'Slightly Out of Reach' Mid-term Targets; Estimates Up

07:27 AM EDT, 10/28/2026 (MT Newswires) -- Berenberg retained Sodexo (SW.PA) at hold, with analysts saying the French food services and facilities management company's mid-term targets look "slightly out of reach" amid increasing leverage. "We remain below mid-term targets, however, forecasting organic growth of 4.3% at a margin of 5% in FY30 versus guidance of more than 5% for both. Further operational momentum would give us confidence that this is achievable, particularly if net new business trends towards the 3% target; however, this requires consistent execution, which in our view is difficult to underwrite given that we remain at an early stage of Sodexo's material restructuring investments and transformation," according to a Wednesday note. Zooming into its fiscal 2026 results, the research firm said Sodexo's 2% organic revenue growth beat both the company's guidance and consensus forecasts of 1.5%, helped by a "strong" fourth-quarter performance. Analysts added that Sodexo's fiscal 2027 guidance of organic revenue growth between 2% and 3% was "prudently set," and raised their own organic growth estimate to 3%. As such, Berenberg raised its Sodexo sales, EBIT and EPS projections for 2026 to 2028. The stock's price target was also increased to 60 euros from 50 euros.