Teleperformance slips after DB downgrade on AI-related pricing risk

** Shares in Teleperformance TEP edge down 2% after Deutsche Bank cuts the French call centre and outsourcing firm to "hold" from "buy", saying it expects generative AI to put pressure on pricing

** "Generative AI is still nascent technology and it will take time to initiate large scale automation of volumes" -DB

** However, the broker expects vast adoption of automation to result in a turbulent operating environment and surging pricing pressure in the medium term

** Because of this, DB sees significantly slower revenue growth and weaker profitability for Teleperformance compared to the previous decade

** Key barriers to wide-scale adoption of automation are likely to stay in place over the coming quarters though, it adds

** Out of 18 analysts covering Teleperformance, 11 rate it "strong buy"/"buy", six "hold" and one "sell"

** Teleperformance shares have fallen around 57% since their 2023 peak in February