Oddo BHF maintains its 'outperform' rating on Sopra Steria shares, with a price target lowered from €260 to €254 after the group reported Q3 organic growth 'slightly below expectations' (sales of 1,345, 1% below expectations).
Management is referring to a gradual slowdown in activity during the quarter, which should continue in France, without any sharp drop, reports the broker.
Against this backdrop, Sopra Steria's management has confirmed its 2023 guidance of organic growth and FCF of at least 300 ME.
At this stage, the tone is relatively cautious for 2024. According to management, organic growth should be below the traditional 4-6% range (consensus is currently 4.2% for the org).
Overall, these figures remain solid in relation to peers and close to expectations', concludes Oddo BHF, for whom 'the share's decline therefore seems exaggerated, even if it has to be admitted that the share's momentum, like that of the rest of the sector, will remain mixed over the coming months'.
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Sopra Steria Group is one of the leading French companies providing IT services. The activity is organized mainly around three areas:
- consulting services: strategic consulting, implementing of restructuring projects and development towards new technologies, etc.;
- systems integration and solutions: design and implementation of Internet technology solutions (portals, merchant sites, Intranet and Extranet networks, etc.), integration of ERP solutions, implementation of application solutions (customer relationship management, HR management, etc.). The group also offers subcontracting solutions for providing technical support to users and application maintenance;
- outsourcing services and operation of professional processes: supervision, administration and operation of IT infrastructures, operation of finance, administration, human resources functions, etc.
Net sales break down by market between industry (29.6%), services (24.6%), public sector (19.4%), finance (16%), telecommunications and media (7.2%) and retail (3.1%).
53.5% of net sales are generated abroad.
SOPRA STERIA GROUP 
