Berenberg more than halves target price on Tracsis
Analysts at Berenberg more than halved their target price on software business from 1,150.0p to 550.0p on Thursday following the group's interim results.
Berenberg noted that given the uncertainty in UK rail and the potential impact from US tariffs on procurement activities, Tracsis has downgraded its FY25 expectations, with adjusted underlying earnings now expected to be in the range of £12.5m-13.5m, with the mid-point implying a roughly 15% downgrade versus consensus estimates.
The German bank reduced its FY25 forecast to £12.5m, down 22% on its prior forecast, and rebased its FY26 and FY27 adjusted underlying earnings forecasts, assuming a "more modest revenue growth and margin outlook", reflecting "continuing uncertainty" into FY26.
"While near-term headwinds impact our forecasts, we still think Tracsis is well positioned, with a clear growth strategy, and fundamentals are strong, with a healthy net cash balance sheet," said Berenberg, which reiterated its 'buy' rating on the stock.
Berenberg also noted that Tracsis' newly announced share buyback was indicative of management's confidence in the long-term outlook. It added that Tracsis' shares were trading on 11.8x FY25 price-to-earnings ratio on its revised forecasts.
Reporting by Iain Gilbert at Sharecast.com
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