Elior's Stock Hits Three-Year Low
Elior Group's stock continues its decline following last week's warning about its annual targets. The stock hit a new session low as a major analysis firm downgraded its recommendation. The French macroeconomic environment, marked by an unprecedented contraction of activity since the pandemic, intensifies the pressure on the stock.
Citi Lowers Its Recommendation and Cuts Its Price Target from €3.60 to €2.40
Elior Group fell by 2.64% to €1.99 at midday, after having touched €1.97 during the session, its lowest in three years. The previous low of €1.98 dated from 2023. On Tuesday, Citi lowered its recommendation from 'buy' to 'hold' and reduced its price target from €3.60 to €2.40. This downgrade follows the revision of the annual targets, presented on May 20 during the semi-annual publication. The group revised its forecast for organic growth from 3-4% to 1-2% for the fiscal year 2025-2026, and its target for adjusted EBITA margin from 3.5-3.7% to about 3%, due to delays in the deployment of new contracts. A provision of 25 million euros was made. Regarding positioning, five funds accumulate 3.36% of the capital sold short, up by 0.62 point over a month according to the statements consulted. This measured progression reflects a growing mistrust without a sudden shift, to be monitored in the coming weeks without considering it an isolated signal.
A Stock at Its Lowest, Heavily Displaced Below Its Moving Averages
Today's decline brings the weekly loss to nearly 32% and the three-month decline to 27%. The stock is trading well below its moving averages: the MM20 at €2.64, the MM50 at €2.55, and the MM200 at €2.67 are all between 22% and 25% above the current price, indicating a prolonged trend break. The RSI at 29 enters the oversold zone, without yet triggering a technical rebound at this stage. The support at €1.98 was breached in the morning, paving the way for levels not seen in a long time. The economic context does not help. The French Flash Composite PMI index fell to 43.5 in May, its lowest level since November 2020, with the services sector contracting sharply (42.9). For a player in collective and concession catering, the consumption environment and the dynamics of private contracts are an immediate point of vigilance.
