Morgan Stanley followed suit on Tuesday by lowering its rating on Teleperformance, citing concerns over the short-term performance of the customer experience outsourcing specialist, despite a valuation described as "depressed."

In a morning note, analysts at the U.S. bank indicated they have downgraded the stock from "overweight" to "equal-weight" and slashed their price target to 53 euros from 112 euros previously.

The analysts offered a "mea culpa" on the stock, acknowledging that the group's market valuation has failed to find a floor as they had expected, despite resilient cash flow and the implementation of capital redistribution measures including share buybacks.

Compounding these issues, in their view, are governance changes and a weakening of business activity that are likely to exacerbate the current climate of uncertainty.

Share buybacks no longer enough to reassure

"While we previously acknowledged the uncertainty weighing on the medium-term financial outlook amid the development of AI and the company's transformation plan, we believed that capital allocation represented an upside lever for the share price (via buybacks) and that a depressed valuation offered a positive risk-reward balance," the firm noted.

"However, management changes, the portfolio review, and limited visibility on capital allocation are heightening commercial uncertainty, and we therefore believe it is justified to remain on the sidelines for the time being," MS continued.

According to its estimates, the company's organic growth, which deteriorated significantly at the end of 2024, is expected to remain negative over the first three months of the year.

Shortly before 10:00 a.m., the stock was down more than 2% at 48.5 euros, hitting new lows since late 2014, while the SBF 120 index slipped 0.2%.

Citi had already lowered its recommendation on the stock yesterday from buy to neutral, nearly halving its price target from 97 to 50 euros, anticipating increased pressure on margins due to intensifying competition. That move led the shares to close down more than 3.1% at the end of the session.