Sopra Steria Group: Looking beyond 2017, and no big concerns on SSCL
BUY, Fair Value EUR130 vs. EUR121 (+13%)
We reiterate our Buy rating and have raised our DCF-derived Fair Value from EUR121 to EUR130, following the increase in our medium-term assumptions for lfl revenue growth from 4.5% to 5% (+EUR5/share) and for adj. EBIT margin from 9% to 9.5% (+EUR4/share). While at this stage we are confident that FY17 targets are likely to be achieved, we consider that Sopra Steria has the means to deliver operating margin of 10% or more over the medium-term (barring an economic shock).
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