Atos is downgraded by 2 brokers (MS & CS) and consequently plunges by more than 5%. CS doubts about the FCF sustainability.

Shares are at a 18 percent discount to the analysts’ consensus target price. The stock traded at an average 7.7 percent discount over the past year. and its valuation has now derated to the low band of its 7 years range :

Figure 1: evolution of ATOS’ various valuation metrics

As always, this knee-jerk reaction can last for some time, so the short put is for us a better strategy that an outright buy. Once the dust settles, we will either become long if exercized or bank a 3% premium for just a few days.