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On Friday, Deutsche Bank (ETR:DBKGn) raised the price target for SoftwareOne (SWON:SW) to CHF 7.40, up from CHF 6.20, while maintaining a Hold rating on the stock. The adjustment follows SoftwareOne’s efforts to address its underperformance in the North American (NORAM) region over recent quarters. The company’s NORAM segment has struggled due to rapid go-to-market (GTM) implementation and restructuring.
Deutsche Bank’s analysis indicates that SoftwareOne’s business, which relies heavily on relationships, might benefit from reallocating accounts to former sales managers rather than attempting to forge new relationships. Since April, SoftwareOne has been actively re-hiring key personnel to improve its performance in NORAM.
The bank acknowledges that these measures are a step in the right direction, but it also anticipates that it will take time for these changes to yield results. Deutsche Bank points out potential risks to the company’s guidance, noting that management’s forecast is contingent upon the recovery of the NORAM segment. This is particularly concerning in light of the current macroeconomic uncertainty, which has been causing delays in decision-making. The guidance provided by SoftwareOne is also back-end-loaded and comes with low visibility, adding to the risks highlighted by Deutsche Bank.
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