Teleperformance: What if the stock market got carried away by the risks of AI for Teleperformance?

(BFM Bourse) – The title of the specialist in outsourced customer relations has recovered almost 12% since Friday, as investors qualify the implications of generative artificial intelligence on the group’s business model.

Teleperformance has completed a small stock market rally in the past few sessions. With the increase of 4% this Tuesday to 157 euros around 3:20 p.m., the outsourced customer relationship specialist has rallied nearly 12% over three sessions, ie since Friday’s open.

It is possible that the market will take a small breath of relief as the group has been maintained within the CAC 40, unlike Vivendi, which will give way in a few days to Edenred, as announced on Thursday evening by Euronext’s Scientific Council . The drop in the group’s title, by 30% since January 1, the strongest of the Paris index, could potentially threaten its place in the stock market’s elite.

A Parisian analyst nevertheless evokes other factors to explain the price increase. “Several research firms have released positive comments and the market is probably now trying to understand the impact of artificial intelligence (AI) on society. was way oversold, which explains the title’s rebound”, he explains.

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AI, threat or opportunity?

The Teleperformance share was punished by publications below expectations in terms of growth, the announcement of a large-scale acquisition (Luxembourg Majorel for a total of 3 billion euros) not necessarily well received by the market, with a small dilution of shares to the key , Teleperformance plans to partially pay this redemption in shares. But also because of fear that the emergence of generative AI, personified by chatbots like ChatGPT, will disrupt the company’s business model.

The whole question, however, is whether the market has over-sanctioned the stock. In a note released last week, Royal Bank of Canada responded in the affirmative. “We consider Teleperformance shares to be grossly oversold due to investor anxiety about the long-term disruptive impact of ChatGPT and the like,” wrote the Canadian bank, which maintained its “outperform” rating and lowered its price target to 230 euros.

“Regardless of the scenario,” “we believe AI will profoundly change the landscape of the customer experience industry over the long term. However, we believe the current stock price does not reflect the potential for Teleperformance to continue to adapt and capitalize on new AI-related revenue streams or benefit from increased outsourcing penetration and organic market share gains,” Royal Bank of Canada also argues. The bank is also positive about the acquisition of Majorel, which it says should allow for double-digit earnings per share growth in 2025.

Recall that during the presentation of its first quarter revenue in late April, Teleperformance made an effort to present generative artificial intelligence as a possibility.

The company has also developed its own product “TP GPT”‘ which integrates technologies from OpenAI, the company behind ChatGPT. The company estimates that 20% to 30% of its volumes can be automated in the next three years and emphasized that AI could “optimize its operations”. She gave as an example a phone call whose duration was reduced by 39% thanks to these technologies.

“ChatGPT is a great opportunity to continue to develop new, more efficient hybrid solutions that combine automation and employee expertise. Teleperformance is also using this technology to accelerate the transformation of its own operations, especially in terms of recruitment and training”, said his side. said Bhupender Singh, chairman of the group’s transformation, quoted in a letter to shareholders published in June.

Julien Marion – ©2023 BFM Bourse

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