Berenberg cuts GFT Technologies to 'hold', sees slowing demand

GFT Technologies SE

10/06/2022 09:19

June 10 (Reuters) -    ** Berenberg cuts German IT services
provider GFT Technologies to "hold" from "buy", saying slowing
demand environment could pose a risk to forecasts
    ** The broker says even though shares have significantly
outperformed since April, reaching a new all-time-high in early
June, slowing demand environment from 2023/24 could pose a risk
to forecasts
    ** "Given deteriorating earnings conditions at most
investment banks, we see a greater risk that smaller-sized and
lower-quality projects in GFT's project pipeline will make it
challenging for the company to maintain its current growth
trajectory," it says
    ** Berenberg says there could be pressure on margins growth
due to wage inflation and elevated employee attrition
    ** It adds that without sizable active M&A, it expects the
company's EBITDA growth to drop significantly next year (14%
year-on-year versus 30% y-o-y expected for 2022)
    ** GFT stock is down 2.9%



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