On Wednesday, Kepler Cheuvreux shifted its stance on Teleperformance (TEP:FP) (OTC: TLPFY) sharres, elevating the stock from a Hold to a Buy rating. The firm also increased the price target for Teleperformance from EUR105.00 to EUR130.00. The upgrade was influenced by potential short-term catalysts that could positively impact the company's valuation and market perception.
The analyst highlighted the recent leadership changes at Teleperformance as a key factor for the upgrade. The appointment of the company's largest shareholder, Moulay Hafid Elalamy, as Chairman, and the return of Thomas Mackenbrock in a leading role, are expected to expedite the CEO transition set for early 2026. These changes are anticipated to align interests more closely and could be welcomed by investors, potentially heralding a new chapter for the company.
Another aspect contributing to the positive outlook is the sequential improvement in like-for-like (LFL) sales growth. This trend is seen as a reassurance to the market, supporting the expectation for profitable growth and the company's ability to reduce debt by 2025. The analyst suggests that even slight positive developments could trigger a reevaluation of the stock's price-to-earnings ratio, moving it from 6x to 9x, which would signify a 50% increase.
Teleperformance also appears to hold an edge over its U.S. counterparts due to its Specialised Services business. According to the analyst, this division stands out as a particularly valuable asset, unaffected by advancements in artificial intelligence (AI), and could justify a valuation higher than the current 6x earnings.
In summary, Kepler Cheuvreux sees the recent strategic changes and sales growth as promising indicators of Teleperformance's future performance. With the stock currently valued at less than 6x earnings, the firm believes that Teleperformance is positioned for a potential rerating and has thus raised its price target to EUR130.00 while upgrading the stock to a Buy rating.
This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.