Edenred Shares Plummet After Q3 Results

Investing.com — Shares of Edenred (EPA:EDEN) fell sharply on Thursday following the release of its Q3 results, missing revenue expectations by about 2% and providing a more cautious outlook for 2025 and 2026.

At 5:34 am (0934 GMT), Edenred was trading 13.8% lower at €29.65.

Edenred reported total revenues of €682 million, which fell short of the consensus estimate of €695 million. The company also narrowed its 2024 EBITDA guidance to €1,245–1,285 million, shifting to the middle of its previous range of €1,230–1,300 million.

The shortfall in revenue was driven by weaker performance across key divisions and regions. Employee Benefits, one of Edenred's largest segments, reported €398 million in revenue, below consensus estimates of €407 million. Mobility Solutions and Complementary Solutions also lagged behind market expectations, generating revenues of €152 million and €69 million, respectively.

Geographically, the largest miss was in Europe, which generated €367 million compared to the expected €377 million. On a brighter note, Latin America exceeded forecasts with €189 million in revenue, surpassing the consensus of €186 million.

Analysts at Citi Research flagged that the revenue miss, combined with a narrowed guidance, contradicts Edenred’s typical pattern of tightening guidance towards the higher end. This shift may suggest a slowdown in the company's growth momentum, especially in light of potential regulatory changes in key markets.

A major concern raised by Citi is the proposed 5% fee cap on meal vouchers in Italy, expected to take effect in the first half of 2025. Edenred has opposed this proposal; however, if enacted, it could lead to an estimated €60 million decrease in sales for that year. In 2025, Citi anticipates the fee cap to impact EBITDA growth, with a growth rate of over 10% compared to the mid-term target of 12%.

Due to the regulatory uncertainty in Italy and already moderated growth expectations for EBITDA in 2025 and 2026, Edenred's outlook has become less favorable, putting pressure on its stock.