Barclays Keeps Veolia Environnement at Overweight Amid Weather-driven Demand
Barclays reiterated Veolia Environnement's (VIE.PA) overweight rating, saying the company is well-positioned to capture upside from El Niño-driven weather impacts. The research firm on Monday added that rising temperatures and water scarcity are expected to drive higher drinking water volumes in France and Spain. "In our view, the El Niño water-volume tailwind adds a timely, tangible support to a broader Overweight thesis already underpinned by resilient earnings growth, stronger pricing protection, improving cash generation and a shift towards higher-return activities. The WTS minority buyout and Clean Earth acquisition should further enhance the business mix, while [data center] cooling, water treatment and broader AI-linked infrastructure demand provide credible structural growth optionality," the note said. "With returns improving, we see the Group surpassing its 9-10% medium-term after-tax [return on capital employed] target by 2028E - valuation still supportive and our 2026-28E adj. EPS estimates ~2-3% above consensus, Veolia remains one of our preferred names in European Utilities," analysts added. The French waste and water management company has a price target of.
Barclays reiterated Veolia Environnement's (VIE.PA) overweight rating, saying the company is well-positioned to capture upside from El Niño-driven weather impacts.
The research firm on Monday added that rising temperatures and water scarcity are expected to drive higher drinking water volumes in France and Spain. "In our view, the El Niño water-volume tailwind adds a timely, tangible support to a broader Overweight thesis already underpinned by resilient earnings growth, stronger pricing protection, improving cash generation and a shift towards higher-return activities.
The WTS minority buyout and Clean Earth acquisition should further enhance the business mix, while [data center] cooling, water treatment and broader AI-linked infrastructure demand provide credible structural growth optionality," the note said. "With returns improving, we see the Group surpassing its 9-10% medium-term after-tax [return on capital employed] target by 2028E - valuation still supportive and our 2026-28E adj.
EPS estimates ~2-3% above consensus, Veolia remains one of our preferred names in European Utilities," analysts added.
The French waste and water management company has a price target of.