Sodexo Shares Hit 15-Month High on JPMorgan Overweight Upgrade

Shares of Sodexo surged to a 15-month high on Thursday after analysts at JPMorgan upgraded the French catering and facilities management company to "overweight" from "neutral." The bank also significantly raised its price target on the stock, signaling renewed confidence in the firm's growth prospects.

Upgrade Drives Market Rally

In response to the upgrade, Sodexo's shares jumped 4.8% to €59.10, their highest point since early June 2025. The stock's performance sharply outpaced the broader French market, with the CAC 40 index up approximately 0.5% in early trading, according to the report.

JPMorgan lifted its price target for Sodexo to €68 from a previous €54. The new target suggests a potential upside of about 20% from the stock's closing price of €56.40 on September 16.

Turnaround Story Gains Traction

JPMorgan's positive outlook is based on the view that fiscal 2027 could be an inflection point for Sodexo's new-business development. The bank cited the company's recent contract win with Meta, announced in July, as a critical "proof point" of this turnaround.

Key details of the Meta contract include:

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• Workplace food services across more than 30 countries.
• Covers corporate offices, data centers, and conference hubs.
• The contract is expected to ramp up over the coming months.

Analysts at the bank now expect Sodexo's net new business to return to slightly positive territory in fiscal 2027, breaking a recent trend of declines.

Valuation and Outlook

According to JPMorgan, while Sodexo's shares have begun to price in a recovery, they remain inexpensive relative to historical valuations and industry peers. The stock is reportedly trading at about 8 times its one-year forward valuation, up from roughly 7 times after its first-half results.

The bank believes there is still scope for further gains and a potential multiple expansion if the company demonstrates more consistent execution and contract wins. JPMorgan projects a gradual recovery, forecasting Sodexo's EBIT margins to improve to 4.6% by fiscal 2030 from 3.3% in fiscal 2026, with cash conversion rising toward 50%.