Veolia Environnement SA

VIE: XPAR (FRA)

Morningstar Rating for Stocks	Fair Value	Economic Moat	Capital Allocation
	€69.00	Pqyhwm	Swmlkcbxx

Veolia: Upgrading Economic Moat Rating to Narrow and Fair Value to EUR 36

Tancrede Fulop

Apr 29, 2024

We raise our fair value estimate for Veolia to EUR 36 from EUR 32.50 after upgrading our economic moat rating to narrow from none. Our new fair value involves a 2024 P/E of 17, enterprise value/EBITDA after concession renewal expenses of 7.8, free cash flow yield of 3.5%, and dividend yield of 3.9%. We see the shares as undervalued as the market is neglecting the group's transformation that reduced its cyclicality by increasing the weight of moaty activities.

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