Sopra Steria Shares Drop 2.5% and Fall Below Key Moving Averages
In mid-morning trading, the stock of the French IT services company declines within a retreating SBF 120 index. The stock erases some of its quarterly gains as bearish bets have been receding for a month.
The Stock Falls Below Its Moving Averages and Flirts with a Key Support at €130.10
Sopra Steria drops 2.61% to €137.90, among the steepest declines in the SBF 120 as the broader index falls by 0.46%. The stock moves below its 20-day moving average (MM20) at €147.63 (a -6.59% gap) and also slips under its 200-day moving average (MM200) at €138.63, while the 50-day moving average (MM50) at €138.26 is now in contact with the price. The RSI at 49 remains neutral, indicating that today's movement has not yet shifted into an oversold configuration.
The decline continues from the previous day's drop, which had already taken the stock out of the bullish channel that started in late April. The quarterly performance is still largely positive (+21.82%), but the pullback brings the stock to less than 6% above its support at €130.10, a level to watch if the downward trend continues.
Bearish Bets Recede and Valuation Remains Contained at 7.7 Times Earnings
According to reviewed statements, three funds hold a cumulative 2.85% of Sopra Steria's capital sold short, down from 3.27% a month ago (-0.42 point). This easing signals a gradual reduction in bearish positions, yet a portion of institutional investors remains positioned against the stock, which could amplify downward movements in case of adverse news. Conversely, a prolonged decline in cumulative short positions could technically support the stock.
Regarding valuation, according to the consensus of surveyed analysts, the stock is trading at approximately 7.7 times the expected earnings for the current fiscal year and 7.1 times those of the following year, with an expected EPS growth of 9.2% from one year to the next. Operationally, the group continues its industrial refocusing with exclusive negotiations initiated at the end of May to acquire Daher's Manufacturing Engineering branch and the Digital Product Simulation firm. The €130.10 support level remains the next technical level to observe.
