Berenberg lowers target price on 'well positioned' Craneware
By Iain Gilbert
Date: Tuesday 31 Mar 2020
(Sharecast News) - Analysts at Berenberg lowered their target price on software and services firm Craneware from 2,500p to 2,000p on Tuesday, despite noting that the firm appeared to be "well positioned" in the current Covid-19 environment.
However, while Berenberg said it did see "some impact" on 2020 full-year estimates, the analysts pointed out that Craneware had "a number of qualities" that made it "a rare asset" in today's market.
The German bank highlighted that Craneware has "excellent" revenue visibility over the next three years, stable 28% underlying earnings margins and also pointed out that the group remained free cashflow generative with a "pristine" balance sheet.
"These qualities have yet to be seen by the market, with shares declining 40% year-to-date. We feel this leaves a valuation that ascribes little to its growth opportunities and, considering recent momentum in new sales, offers an attractive risk-reward profile," said Berenberg, which also reiterated its 'buy' rating on the firm.
"Craneware is in a robust position to not only move through this period of uncertainty, but also to possibly take advantage of the share price volatility by buying back shares."
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