Barclays stays at 'overweight' on Softcat
Softcat
1,621.00p
15:45 15/11/24
Analysts at Barclays reiterated their 'overweight' recommendation and 1,260p target price for Softcat's shares, telling clients that the solid underpinnings of the business would drive a return to double-digits earings growth.
FTSE 250
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15:45 15/11/24
FTSE 350
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15:45 15/11/24
FTSE All-Share
4,411.85
15:45 15/11/24
Software & Computer Services
2,469.20
15:44 15/11/24
Soft demand from companies meant earnings growth had slowed down and was in turn weighing on the software specialist's ability to drive growth.
That posed a challenge particularly for Softcat, what with the company's shares already trading on 30 times' their estimated forward price-to-earnings multiple.
Nonetheless, its employees continued to be engaged and its clients satisfied, the broker said.
To back up that affirmation it pointed to its ranking - for a second year in a row - as the fifth best employer in the UK according to Glassdoor.
Investment continued to be substantial as well, with its headcount expected to increase by 10% over the full 2021 fiscal year.
"We remain confident that the business can return to double-digit earnings growth in a recovered market and that in the interim management has the balance sheet and profitability to continue investing in the business."