RBC Updates Model for Sodexo After Capital Markets Day; Sector Perform Rating Maintained

06:18 AM EDT, 07/21/2026 (MT Newswires) -- RBC Capital Markets revised its model for Sodexo (SW.PA), tweaking its earnings estimates and price target to account for the French food services and facilities management company's recent investor event. "We make material cuts to earnings and [free cash flow] estimates for FY27-28, reflecting the costs of getting SW back to being 'match fit' for the longer term. However, SW's new CEO has laid out a very credible path to recovery and, though execution risk remains, we think clarity (and potentially a degree of conservatism) warrants a lower [weighted average cost of capital]. Our PT rises to [EUR52 from EUR45] and we remain at Sector Perform, preferring Outperform-rated ARMK in the broader global catering sector," analysts said Monday. The research firm reduced its fiscal 2027 and 2028 EPS projections by 14% and 13%, respectively, to integrate Sodexo's planned commercial capability investments and the company's outlook for "broadly stable" year-over-year margins, compared with fiscal 2026 figures. RBC also accounted for the 1 billion euros in below-the-line transformation expenses, which are expected to impact GAAP earnings and free cash flow forecasts. Analysts also reduced their 2027 and 2028 revenue forecasts, while raising their dividend per share assumption for the same period.