BofA names its picks in European software, IT services & payments
06/07/2022 15:04
** BofA Global Research adjusts its medium-term outlook for
European software, IT services and payments sectors to mirror
the increasing macroeconomic uncertainty
** It notes EMEA software space is highly diversified
geographically, which should provide some resilience to macro
revenues, while IT services and payments are more local
** Though companies remain confident at this stage, the
broker says it would keep an eye on comments on deal
slippage/demand through Q2 earnings season
** Within software, BofA prefers Germany's Suse SUSEG.DE ,
which it expects to post sector-leading 18% growth in Q2, and
SAP SAPG.DE on long-term value from accelerating cloud
traction (both "buy")
** Among IT services, it sees solid growth in short- to
medium-term from France's Capgemini CAPP.PA with potential for
guidance hikes, while Denmark's Netcompany NETCG.CO should
maintain its sector-leading growth (both "buy")
** The payments sector's valuation is at multi-year lows
despite solid growth prospects, it says, preferring Dutch Adyen
ADYEN.AS and France's Worldline WLN.PA (both "buy")
** In separate note on travel IT, it cuts Spain's Amadeus
AMA.MC to "neutral" from "buy" as airlines trim schedules amid
the European travel chaos; ups U.S. rival Sabre SABR.O to
"buy" from "outperform" predicting "bumpy recovery" in H2
(Reporting by Marta Serafinko)
((Marta.Serafinko@thomsonreuters.com; +48 58 769 66 00;))