CompuGroup falls after MS cuts stock to 'underweight'

CompuGroup Medical SE & Co KgaA

14/06/2023 08:34

** Shares in CompuGroup Medical  COP1n.DE  fall around 5%
after Morgan Stanley downgrades the German medical software
company to "underweight" from "equal-weight"
    ** "We think the market is pricing in higher growth and
margin expansion than we assume," says the brokerage, seeing
EBITDA margin expansion constrained by the faster growth of
lower-margin segments in the medium term
    ** It raises mid-term organic growth estimate for the
"lower-margin" Hospital Information Systems division to 11%,
citing more bullish revenue assumptions from the German Hospital
Future Act aimed at boosting hospitals' digitalisation
    ** MS says European software peers Amadeus  AMA.MC , Sage
Group  SGE.L  and SAP  SAPG.DE  offer a "more compelling
investment opportunity" and risk/reward for broadly similar
valuations
    ** "We see SAP, Amadeus and Sage as low to mid-teens EBIT
growers vs high-single-digit for CGM," it says
    ** CompuGroup hits the bottom of the German small-cap index
 .SDAXI , on track for its worst day since January

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