Berenberg cuts CompuGroup to 'hold' on limited short-term upside

CompuGroup Medical SE & Co KgaA

12/06/2023 07:14

** Berenberg cuts CompuGroup Medical  COP1n.DE  to "hold"
from "buy" as it expects margins to improve in the remainder of
2023 but stays cautious about mid-term margin accretion
    ** The brokerage says the German medical software company
looks set for margin recovery following investments,
internationalisation and M&A over the past year
    ** However, it sees less than 15% upside to the current
stock price, given the recent re-rating
    ** Berenberg expects the software unit's adj. EBITDA margin
to exceed 22% in Q2 and Q3 despite pressure from wage inflation,
after the roll-out of connector software upgrade PTV5
    ** The brokerage says parts of the FCF impact from the
roll-out are unlikely to materialise before Q3
    ** "We believe that necessary investments in its platform
and the ongoing need to add skilled personnel will make it hard
to reach an adjusted-EBITDA margin of 27% by 2025," it adds
    ** Out of 13 analysts that cover CompuGroup, 11 rate it
"strong buy"/"buy" and ​two "hold"

 (Reporting by Anna Mackenzie)
 ((Anna.mackenzie@thomsonreuters.com))