Investing.com - Morgan Stanley (NYSE:MS) recommends buying shares of Edenred (EPA: EPA:EDEN), citing its attractive valuation after a 31% decline since the start of the year. Businesses focused on employee benefits in France, Brazil, and Italy are currently valued at a multiple of 2-4x EBITDA, which Morgan Stanley considers low. Edenred is regarded as a high-quality company with strong fundamentals and has posted annual growth of 12-14% over the past nine years.
Despite challenges such as falling interest rates and low inflation, Morgan Stanley anticipates an 11% increase in earnings for Edenred. The company's targets, including adjusted EBITDA growth of 12% or more, seem achievable, with potential earnings per share growth of 16%.
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Due to these favorable factors, Morgan Stanley has upgraded its rating on Edenred to "overweight" and adjusted its price target to €51 from the previous €55. Edenred is also highlighted as one of the best investment options in the leisure and travel sector for the fourth quarter. Additionally, Morgan Stanley has expressed interest in other companies within this sector, such as Accor (EPA:ACCP), Flutter, and Sodexo (EPA:EXHO).
According to InvestingPro models, Edenred's stock could climb by 15% to reach a fair value of €43.
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