We believe Veolia will witness moderate top-line growth going forward, driven by the start of new engineering contracts and the high rate of renewal of its existing contracts. In addition, we expect increased long term revenue contributions from several acquisitions completed in FY 2008. However, the growth in revenues will be constrained by a decline in the company’s environmental services business (28.2% of total revenues in FY 2008), which has been severely affected…

Although Veolia Environnement S.A.’s (Veolia) FY 2008 revenues were in line with our estimate, profitability was significantly below our expectation. Given the prevailing economic uncertainty, we expect to significantly reduce our estimates and target price in our next update report. As a result, although the target price derived in our previous update report does not support a HOLD rating at current price levels, we maintain our…

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Veolia Environnement S.A. (Veolia) has announced that the company is expecting a y-o-y net profit decline in FY 2008. Given the company’s cautious outlook for FY 2008 and prevailing economic uncertainty, we maintain our HOLD rating for the Veolia common stock, even though the current target price suggests a BUY. As we now anticipate a significant negative currency impact over the medium term and given…