Edenred: Strong Revenue Growth Continues

The momentum behind wide-moat Edenred's revenue growth showed no sign of letting up in the third quarter, with like-for-like revenue up almost 24% year over year. Operating revenue growth got a welcome boost from higher interest rates, which generate higher returns on cash on deposit. With the 9-month performance tracking guidance, management made no change to their full-year EBITDA target of EUR 1.055 billion at the midpoint, which represents 26% growth on 2022. With the shares having fallen recently, largely on French antitrust concerns, we see attractive upside to our EUR 69 fair value estimate.