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Veolia Environnement (VEOEY)
OTHER OTC:VEOEY
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Veolia Environnement
(OTC:VEOEY)
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Rating:56Neutral
Price Target:
$20.00
▲(15.67% Upside)
Action:DowngradedDate:03/05/26
The score is held back primarily by financial risk factors—especially the balance-sheet leverage deterioration and volatile free cash flow—despite improving profitability. Offsetting this, the latest earnings call and guidance were positive (strong EBITDA/margin execution and growth targets), valuation is supported by a solid dividend yield, and technicals indicate a modest longer-term uptrend but with currently neutral momentum.
Positive Factors
Margin expansion and ROCE improvement
Sustained margin expansion and a ROCE of 9.4% signal stronger operating leverage and capital efficiency across core services. This supports durable cash generation potential and resilience to revenue cycles by converting incremental revenue into higher profits, improving long-term return profiles.
Consistent operating cash flow
Stable, multi-year operating cash flow (~$4.3B in 2025) underpins the firm's ability to fund operations, invest in infrastructure, and support dividends or M&A. Reliable OCF reduces refinancing risk and provides a buffer against cyclical revenue swings over the medium term.
M&A track record and realized synergies
Demonstrated ability to acquire and integrate businesses while delivering synergies (Water Tech, Suez) shows execution capability. Expected Clean Earth accretion and targeted synergies provide structural growth levers and scale benefits that can lift margins and expand service footprint over multiple years.
Negative Factors
Material increase in leverage
A sharp jump in leverage to ~4.7x materially constrains financial flexibility, raises refinancing and covenant risk, and limits capacity for opportunistic investment. Elevated debt makes the firm more sensitive to interest rates and operational setbacks, a persistent structural vulnerability.
Volatile and weak free cash flow conversion
Large swings in free cash flow and a 72% drop in 2025 indicate unpredictable cash conversion from earnings. This undermines the sustainability of capital returns, debt paydown plans and M&A financing, forcing reliance on disposals or external funding for strategic initiatives.
Stalled top-line growth
Stagnant to declining revenue trends limit the company's ability to scale profits organically. Even with margin gains, persistent weak top-line growth raises questions about demand traction in core markets and the sustainability of profit improvements absent renewed revenue momentum.
Veolia Environnement (VEOEY) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$28.19B
Dividend Yield5.25%
Average Volume (3M)14.52K
Price to Earnings (P/E)18.7
Beta (1Y)0.17
Revenue Growth0.25%
EPS Growth1.94%
CountryUS
Employees202,332
SectorIndustrials
Sector Strength72
IndustryWaste Management
Share Statistics
EPS (TTM)0.34
Shares Outstanding1,461,968,000
10 Day Avg. Volume0
30 Day Avg. Volume14,516
Financial Highlights & Ratios
PEG Ratio-0.39
Price to Book (P/B)3.12
Price to Sales (P/S)0.51
P/FCF Ratio15.61
Enterprise Value/Market Cap1.76
Enterprise Value/Revenue1.12
Enterprise Value/Gross Profit6.34
Enterprise Value/Ebitda7.85
Forecast
1Y Price TargetN/A
Price Target UpsideN/A
Rating ConsensusN/A
Number of Analyst Covering0
EPS Forecast (FY)1.41
Revenue Forecast (FY)$55.70B
Veolia Environnement Business Overview & Revenue Model
Company DescriptionVeolia Environnement S.A. designs and provides water, waste, and energy management solutions worldwide. The company is involved in the resource management, production, and delivery of drinking water and industrial process water; collection, treatment, and recycling of wastewater; and design and construction of treatment and network infrastructure. It also provides waste collection, waste material recovery, waste-to-energy, organic waste material recovery, hazardous waste treatment, dismantling and remediation, urban cleaning, and industrial maintenance and cleaning services. In addition, the company engages in the operation and maintenance of heating and cooling networks; development of energy services to reduce the energy consumption and CO2 emissions of buildings; optimization of industrial utilities; and energy use related to processes and industrial buildings, as well as produces electricity from biomass. It offers drinking water to 95 million people. The company was formerly known as Vivendi Environnement and changed its name to Veolia Environnement S.A. in 2003. Veolia Environnement S.A. was founded in 1853 and is based in Aubervilliers, France.
How the Company Makes MoneyVeolia Environnement generates revenue through a diversified model that includes multiple key streams. The primary sources of income are from its water services, waste management, and energy services. The company earns money by providing water treatment and supply services to municipalities and industries, which involves billing for the consumption of water and the treatment of wastewater. In waste management, Veolia collects, recycles, and disposes of waste materials, charging clients for these services, often under long-term contracts that ensure stable cash flow. Additionally, in the energy sector, the company produces energy from waste and offers energy management solutions, generating revenue from the sale of energy and energy savings. Veolia also engages in partnerships with governments and private entities, which can lead to joint ventures and public-private partnerships, enhancing its capacity to deliver large-scale projects and securing additional funding sources. These various revenue streams, combined with a focus on sustainable practices and innovation, contribute to Veolia's financial performance.
Veolia Environnement Earnings Call Summary
Earnings Call Date:Feb 26, 2026
(Q4-2025)
| % Change Since: |
Next Earnings Date:May 06, 2026
Earnings Call Sentiment Positive
The call was broadly positive: management reported a strong set of financial results (EBITDA growth +6.3%, record margin 15.9%, ROCE 9.4%), significant efficiency delivery (EUR 399m) and crystallized strategic M&A (Water Tech buyout, signed Clean Earth) that enhance growth and value creation. Headwinds exist—notably FX translation, one-off litigation and near-term leverage pressure around the Clean Earth close, plus timing-driven project volatility—but these were framed as manageable and temporary. On balance the positive performance, delivery of synergies and clear pipeline of tech-driven growth opportunities outweigh the challenges.Q4-2025 Updates
Positive Updates
Organic EBITDA Growth Above Guidance
Organic EBITDA grew +6.3% in 2025, outperforming the guidance range of +5% to +6%, driven by strong operating leverage, efficiency programs and booster segment momentum.
Record EBITDA Margin and ROCE
EBITDA margin improved by ~70 basis points to a historical high of 15.9%; after-tax ROCE reached 9.4% (achieved two years ahead of the 2027 target).
Top-Line Growth and Revenue
Reported revenue grew ~+2.8% (excluding energy prices); management cited revenue of approximately EUR 34.4 billion for 2025 with organic growth of ~2.8% excluding pass-through energy.
Strong Net Income and EBIT Progress
Current net income rose +9.1% (at constant FX) and current EBIT increased +8.9%; net income group share reached EUR 1.2 billion, up +10.9% year-over-year.
International and Booster Outperformance
EBITDA outside Europe grew +9.3%; Boosters (Water Technologies, Hazardous Waste, Bioenergies) grew +4.3% organically (+8% including tuck-ins) with EBITDA up ~12% (Boosters EBITDA +12.1%).
Successful M&A and Synergy Delivery
Completed Water Technologies minority buyout (EUR 1.5bn) with EUR 20m synergies already realized and a target of EUR 90m by 2027; Suez integration synergies delivered EUR 534m (above target). Clean Earth acquisition (signed, ~$3bn) expected to be accretive from 2027 and to deliver $120m synergies (2027–2030).
Operational Efficiency and AI Contribution
Annual efficiency program delivered EUR 399m (vs target EUR 350m); 23% of recurring operational efficiencies attributed to digital and AI, with digital contribution rising materially versus prior years.
PFAS and New Technology Growth
PFAS-related revenue reached EUR 259m in 2025 (+25% vs 2022) with a target of EUR 1bn by 2030; new Ecothermal Grid offering has a UK pipeline (~GBP 1bn) and targets EUR 350m additional revenue by 2030.
Prudent Balance Sheet and Shareholder Returns
Net financial debt ~EUR 19.6–19.7bn after EUR 2.3bn net financial investment; leverage 2.79x at year-end (below 3x). Board proposed dividend EUR 1.50/share (+7% vs 2024) and executed ~EUR 402m share buyback to offset employee plan dilution.
Negative Updates
Foreign Exchange Headwinds
Significant negative FX translation impact in 2025 (lower U.S. dollar and Latin American currencies), reducing reported growth; management noted FX remains a volatile translation effect and had a notable negative effect in Q4.
Net Financial Debt Increase and Near-Term Leverage Pressure from Clean Earth
Net financial debt rose by ~EUR 1.8–1.9bn vs 2024 driven by resumed M&A (EUR 2.3bn investment). Leverage expected to be equal or slightly above 3x after Clean Earth consolidation until the planned EUR 2bn disposals are completed in the two years post-close.
Project Timing and Volatility in Water Technologies
Water Technologies experienced project timing effects (milestone delivery timing) that depressed early-year project revenue, creating volatility despite a Q4 rebound (Water Tech full-year revenue +3.6%, excluding projects +4.6%).
One-off Charges and Litigation
Non-current charges of approx. -EUR 433m included additional integration costs, one-off restructuring and an exceptional litigation provision; Flint-related payments approximated EUR 70m, impacting free cash flow.
Energy Price Sensitivity for Specific Activities
Although energy is largely pass-through, energy effects reduced EBITDA by ~EUR 40m in 2025 (less than prior year) and some margin variability remains for cogeneration/ancillary activities.
Regional Revenue Softness (France & Hazardous Waste Europe)
France and Hazardous Waste Europe reported flat to slightly negative revenue in 2025, requiring targeted action plans (Ariane in France, Hunter in Spain) to restore growth; France showed stronger EBITDA improvement despite soft top-line.
Company Guidance
Veolia's 2026 guidance calls for continued solid organic revenue growth (excluding energy prices), organic EBITDA growth of 5–6% and current net income growth of at least +8% at constant FX (guidance excludes Suez synergies and is before the Clean Earth contribution); management expects to keep leverage ≤3.0x pre‑Clean Earth (equal or slightly above 3.0x including Clean Earth at close, returning to ≤3.0x in 2027), assumes a mid‑2026 close of the $3bn Clean Earth deal (accretive from 2027 ex‑PPA with $120m synergies targeted 2027–2030 and ~$90m integration costs over four years) and will deliver a €2bn disposal program in the two years post‑close; Water Tech synergies of €90m by 2027 (≈€20m already achieved in H2‑25), a renewed annual efficiency target of ≈€350m (€399m delivered in 2025, 23% from digital/AI), dividend growth in line with EPS, and an FX net‑income impact broadly similar to 2025.Veolia Environnement Financial Statement Overview
Summary
Income statement trends are mixed (improving EBIT/net margins but weak recent revenue momentum), cash generation is positive but free cash flow fell sharply and is volatile, and the balance sheet is the main constraint with a sharp rise in leverage (debt-to-equity ~4.7x in 2025) reducing flexibility.Income Statement
Revenue has largely stalled and recently declined (2025 down ~4% after a flat 2024), but profitability has steadily improved versus earlier years: net margin rose from ~0.3% (2020) to ~2.7% (2025) and EBIT margin expanded to ~8.4% (2025). Gross margin is stable in the mid-to-high teens, supporting consistent operating performance, though overall margins remain modest for the business and top-line growth is currently a clear weak spot.64
Positive
Balance Sheet
Leverage is the key concern. Debt to equity moved from ~1.5–2.3x in 2020–2024 to ~4.7x in 2025, indicating a sharply more levered capital structure and reduced balance-sheet flexibility. Equity is relatively small versus the asset base, and returns on equity were moderate in 2021–2024 (~3.5% to ~8.5%), with 2025 showing no reported return on equity in the dataset. Overall, the balance sheet looks meaningfully riskier in the most recent year due to the leverage jump.38
Negative
Cash Flow
Operating cash flow has been positive and fairly consistent (~$2.4B to ~$5.0B from 2020–2024; ~$4.3B in 2025), which is a strength. However, free cash flow is volatile and dropped sharply in 2025 (down ~72% to ~$1.4B), and in most years free cash flow covers only a fraction of net income (roughly ~0.24–0.43 in 2020–2023 and ~0.32 in 2025; 2024 is an outlier at 1.0). This points to heavier reinvestment/capex swings and less dependable cash conversion year-to-year.47
Neutral
| Breakdown | Dec 2025 | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 |
|---|---|---|---|---|---|
Income Statement | |||||
| Total Revenue | 42.64B | 44.69B | 45.35B | 42.89B | 28.51B |
| Gross Profit | 7.51B | 7.77B | 7.50B | 7.11B | 4.58B |
| EBITDA | 3.59B | 6.02B | 5.86B | 5.14B | 3.44B |
| Net Income | 1.17B | 1.10B | 937.00M | 716.00M | 404.30M |
Balance Sheet | |||||
| Total Assets | 70.64B | 72.96B | 72.57B | 73.30B | 53.08B |
| Cash, Cash Equivalents and Short-Term Investments | 8.02B | 11.76B | 10.79B | 10.86B | 11.96B |
| Total Debt | 33.33B | 19.96B | 20.46B | 28.58B | 21.04B |
| Total Liabilities | 61.21B | 57.65B | 57.86B | 61.93B | 42.77B |
| Stockholders Equity | 7.02B | 12.91B | 12.31B | 12.26B | 11.52B |
Cash Flow | |||||
| Free Cash Flow | 1.40B | 5.04B | 1.86B | 855.50M | 1.28B |
| Operating Cash Flow | 4.34B | 5.04B | 5.00B | 3.64B | 3.01B |
| Investing Cash Flow | -3.27B | -2.12B | -2.12B | 4.52B | -850.60M |
| Financing Cash Flow | -2.51B | -1.86B | -3.14B | -10.17B | 2.29B |
Veolia Environnement Technical Analysis
Neutral
17.29
Price Trends
18.63
Positive
17.80
Positive
17.55
Positive
Market Momentum
0.36
Positive
45.75
Neutral
3.66
Positive
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For VEOEY, the sentiment is Neutral. The current price of 17.29 is below the 20-day moving average (MA) of 19.89, below the 50-day MA of 18.63, and below the 200-day MA of 17.55, indicating a neutral trend. The MACD of 0.36 indicates Positive momentum. The RSI at 45.75 is Neutral, neither overbought nor oversold. The STOCH value of 3.66 is Positive, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Neutral sentiment for VEOEY.
Veolia Environnement Peers Comparison
UnderperformOutperform
Sector (63)
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
76 Outperform | $99.26B | 32.67 | 29.69% | 1.50% | 15.88% | -3.11% | |
74 Outperform | $15.33B | 31.90 | 14.70% | ― | 2.85% | -6.27% | |
74 Outperform | $971.48M | -1,034.44 | -0.17% | ― | 22.77% | 44.73% | |
72 Outperform | $71.54B | 30.90 | 18.31% | 1.11% | 4.33% | 7.59% | |
63 Neutral | $10.79B | 15.43 | 7.44% | 2.01% | 2.89% | -14.66% | |
56 Neutral | $28.19B | 18.75 | 15.29% | 5.25% | 0.25% | 1.94% | |
52 Neutral | $6.19B | 789.67 | 0.50% | ― | 20.54% | 106.35% |
* Industrials Sector Average
VEOEY
Veolia Environnement
19.22
3.18
19.83%
CWST
Casella Waste
97.48
-12.30
-11.20%
CLH
Clean Harbors
289.74
92.21
46.68%
RSG
Republic Services
231.67
2.59
1.13%
WM
Waste Management
246.09
23.44
10.53%
MEG
Montrose Environmental Group
27.00
9.05
50.42%
Glossary
BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.