Compugroup rises after Berenberg and MS upgrade the stock

CompuGroup Medical SE & Co KgaA

15/01/2024 09:58

** Shares in Compugroup  COP1n.DE  jump 6.6% after Berenberg
raises the German medical software company to "buy" from "hold"
and Morgan Stanley ups it to "equal weight" from "underweight"
    ** The brokers see good prospects in the company's Hospital
Information Systems (HIS) business, as its order book should
compensate for a likely shortfall in Austria
    ** Berenberg sees less pressure on employee costs and
moderating R&D expenses in 2024, saying more progress can be
made to grow margins
    ** "We expect a strong finish to 2023 in the HIS segment and
remain confident that CGM can meet the lower end of its guided
260 million - 300 million euros ($285 million-$329
million)adjusted EBITDA range," Berenberg says
    ** It says consolidation and decommissioning of some smaller
software solutions should further drive the margin
    ** MS says Compugroup is a "quality health tech software
company" with a large recurring revenue base trading at a
relatively fair valuation
    ** MS adds the Ambulatory Information Systems and Pharmacy
Information Systems businesses are relatively mature, with a lot
of digitalisation already done; sees better growth prospects in
the HIS and data businesses
    ** The stock is on track for its best day since October 2022
and sits on top of Germany's small-cap index  .SDAXI 

($1 = 0.9123 euros)

 (Reporting by Ozan Ergenay)
 ((ozan.ergenay@thomsonreuters.com))