JPM starts Nemetschek at 'underweight', flags overestimated earnings growth trajectory

Nemetschek SE

12/12/2024 07:22

** J.P.Morgan starts German software developer Nemetschek
 NEKG.DE  with "underweight" rating, pointing to overestimated
earnings growth trajectory 
    ** Demanding consensus and high valuation, makes risk/reward
skewed to the downside for the shares, JPM says
    ** The broker projects lower EPS growth with 6-7% below
2025/26 consensus, and expects organic growth in 2025 to be
about 13-14%, which is below consensus of 15%
    ** In broker's view, Nemetschek's valuation is now trading
at a typically less sustainable range 
    ** The brokerage "sees valuation as rich, and offering very
little room for error, at a time when the earnings backdrop
encompasses a number of hurdles to overcome"
    ** Still, the broker notes the company has an attractive
business model and is well positioned through the mid-term
    ** The stock falls 2.9% in early Frankfurt trade to the
bottom of the German mid-cap index  .MDAXI 
    

 (Reporting by Amir Orusov)
 ((Amir.orusov@thomsonreuters.com))