Narrow-Moat Sodexo on the Up and Up

With the COVID-19 pandemic in full swing around this time last year, the vast majority of Sodexo’s catering operations were heavily affected. This easier comparative period goes a long way to explaining the almost 20% organic revenue growth seen by the company in the third quarter. That being said, the result comes in ahead of consensus estimates for the quarter, and the company’s positive outlook for the remainder of the year will go a long way to reassuring investors of the resilience of the business model. We maintain our near-term forecasts for now, and reiterate our EUR 90 fair value estimate. We see reasonable upside potential from here.