Atos SE’s (FR:ATO) shares dropped over 3% as of writing today after the company reduced its financial targets through 2027, citing weakened sales amid a challenging business environment. The company also noted a rise in contract cancellations and delays due to softer demand for its solutions. Nonetheless, Atos confirmed that these challenges would not impact its restructuring plan.
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Atos is a French IT company that provides consulting, technology services, cloud and infrastructure services, etc. worldwide.
Atos Trims Guidance
Atos now expects revenue of €9.7 billion for FY24, slightly lower than the earlier forecast of €9.8 billion. Additionally, the company projects that revenue will reach €10.6 billion by 2027, down from the previous estimate of €11.0 billion.
Further, the company expects to achieve an operating margin of €238 million or 2.4% this year, down from the earlier estimate of €282 million or 2.9%. By 2027, it is projected to reach €1 billion, lower than the previous forecast of nearly €1.10 billion.
Atos stock has plunged 88% year-to-date due to mounting financial challenges, including a significant debt burden. The company has also issued several profit warnings and announced numerous changes in top management. Atos reported net debt of €4.2 billion at the end of the first half of 2024, up from €2.3 billion a year ago.
Atos Sticks to Restructuring Timeline
In July 2024, Atos reached an agreement on the financial terms of its restructuring plan with a consortium of banks and bondholders. The company expects the affected parties to vote on the plan on September 27, with a court hearing for final approval scheduled for October 15.
Once the court approves, the plan will be implemented through a series of capital increases and debt issuances from November 2024 to January 2025.
Is Atos a Good Buy Right Now?
According to TipRanks, ATO stock has received a Moderate Sell rating based on one Sell recommendation from CRFA Research. Earlier this month, CFRA analyst Firdaus Ibrahim downgraded his rating on ATO stock from Hold to Sell, predicting a downside of 11.6%. The Atos share price target is €0.70.
