Barclays ups Computacenter price target as shares hit new high

Higher demand for business continuity services appears to have become a structural trend for Computacenter, Barclays said as it increased its price target for the IT infrastructure company.

Computacenter's UK business has boomed as companies have upgraded computer systems to support home working and increase security during the Covid-19 crisis. The FTSE 250 company reported a 39% increase in first-half profit on Wednesday.

After a series of profit upgrades, further improvement is possible in the second half but not highly likely, Barclays said. The bank kept its 'equal weight' rating on Computacenter shares and increased its price target to £21 from £16, reflecting an earnings upgrade to £1.15 a share from 91p a share.

Barclays said it was not "chasing the shares", which have hit a record high. The shares rose to a new peak of £24 on Thursday and were up 3.9% to £23.58 at 13:37 BST.

Computacenter announced the £140m acquisition of Canada's Pivot with Wednesday's trading update. Barclays said the deal had "a few wrinkles" but that the price was attractive and the deal would double Computacenter's US footprint.

"Computacenter's performance is very impressive," Barclays said. "FY21 is harder to project, with an uncertain economic outlook, tough comparatives and business continuity challenges having been solved by businesses this year, but it is arguably premature to worry about that."