SAP and Sage are JPM's top picks in cheaply valued European software sector
04/12/2024 13:47
** J.P.Morgan says its top picks in the European software
sub-sector are "overweight"-rated SAP SAPG.DE and Sage SGE.L ,
while many other stocks' valuation multiples screen more attractive
than historically
** SAP and Sage offer the most attractive earnings growth
prospects on a multi-year view, it says
** It also cites their margin outperformance and potential for
buybacks
** Among JPM's coverage, SAP and Sage are the most progressed in
rolling out their GenAI Copilots, it adds
** IT services sub-sector continues to be pressured by macro
headwinds, as enterprises prioritise IT investments with clear cost
savings and more immediate returns, JPM says
** Demand for discretionary, shorter cycle workloads is also
under pressure, making JPM cautious on the near term
** It names Computacenter CCC.L ("overweight") its IT services
key pick, citing its exposure to hyperscaler growth and AI capex
COMPANY RATING PT OLD PT
SAP overweight EUR 260 -
Sage overweight GBp 1,500 GBp 1,350
Amadeus AMA.MC overweight EUR 73 -
AutoStore AUTO.OL overweight NOK 15 -
IONOS IOSn.DE overweight EUR 27.50 -
OVH OVH.PA overweight EUR 10.50 -
Temenos TEMN.S overweight CHF 73 -
Trustpilot TRST.L overweight GBp 350 GBp 250
Computacenter overweight GBp 2,900 -
Dassault Systemes DAST.PA neutral EUR 34 -
Hexagon HEXAb.ST neutral SEK 112 -
TeamViever TMV.DE neutral EUR 14.50 -
Capgemini CAPP.PA neutral EUR 175 -
Exclusive Networks EXN.PA neutral EUR 24 -
Indra IDR.MC neutral EUR 21 -
SoftwareOne SWON.S neutral CHF 8 -
Softcat SCTS.L underweight GBp 1,450 GBp 1,350
(Reporting by Marta Frąckowiak)
((marta.frackowiak@thomsonreuters.com))