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Investing.com - Bernstein SocGen Group initiated coverage on 74Software (EPA:74SW) with an Outperform rating and a price target of EUR53.00.
The research firm highlighted that 74Software’s investment case differs from typical listed software companies, focusing on organizational transformation rather than revenue growth as the main catalyst.
Bernstein SocGen noted that 74Software plans to apply the same strategy to its recently acquired SBS division that successfully improved Axway’s financial performance between 2018 and 2024. SBS was acquired in September 2024 for EUR330 million, representing 58% of Axway’s market cap when the acquisition was announced in February 2024.
The firm projects that 74Software can achieve 2025-28 compound annual growth rates of 3% in sales, 12.5% in recurrent EBIT, and 50% in free cash flow, compared to industry averages of 9%, 15%, and 10% respectively for European software vendors.
Bernstein SocGen assigned a high probability to the success of 74Software’s transformation plan and stated that this potential is not fairly reflected in the current share price, supporting their positive stance on the stock.
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