Jefferies Upgrades Sodexo to Buy With €55 Target After Historic CEO Appointment

Jefferies has upgraded Sodexo SA (EPA: EXHO) from "hold" to "buy," lifting its price target from €41 to €55, citing renewed optimism following the French food services giant's appointment of its first external chief executive in nearly six decades of operation.

Sodexo shares currently trade around €42.66, having shed roughly 40% of their value since 2024. That decline represents a significant underperformance against industry rivals Compass Group and Aramark, lagging behind them by approximately 45% and 85% respectively, according to Jefferies data.

At the center of this turnaround narrative is Thierry Delaporte, who assumed the Group CEO role in November 2025 and simultaneously took charge of Sodexo's critical North America division. A veteran of Capgemini — where he served as Global COO and Deputy CEO over a 25-year tenure — Delaporte also led Wipro as Group CEO from 2020 to 2024. His appointment marks a structural shift for a company that had only ever promoted from within. Outgoing CEO Sophie Bellon, who stepped down ahead of schedule, remains Chairwoman and has pledged to give Delaporte full strategic autonomy.

The upgrade comes despite Jefferies placing its earnings estimates well below market consensus — roughly 10% below for FY26 and 12% below for FY27. The brokerage projects adjusted EBIT margins compressing to 4% in FY26 before gradually recovering to 4.7% by FY29.

Operational weaknesses, particularly in North America, remain the most pressing concern. Sodexo's net new wins reached just 0.3% in FY25, far behind Compass at 4.5% and Aramark at 5.6%. Client retention also trailed peers at 93.3% versus 96.3%. North America alone accounts for 46% of group revenue and 53% of adjusted EBIT.

Trading at roughly 10 times forward earnings against a historical average of 13 times, Jefferies sees meaningful upside — with bear and bull scenarios implying fair values of €35 and €70 respectively.