Open Text stock price target raised to $35 from $30 at RBC Capital

Investing.com - RBC Capital has raised its price target on Open Text (NASDAQ:OTEX) to $35.00 from $30.00 while maintaining a Sector Perform rating on the stock. The company’s stock has shown strong momentum, gaining over 30% in the past six months and currently trading near its 52-week high of $34.20. According to InvestingPro analysis, Open Text appears undervalued based on its Fair Value estimates.

The price target increase reflects RBC Capital’s view that Open Text shares are likely to experience an upward valuation re-rating due to several factors.

RBC Capital cited potential divestitures that could help reduce the company’s leverage as one of the key factors supporting the higher price target.

The firm also noted that Open Text’s organic growth profile is likely to improve following divestitures of non-core, declining segments of the business.

Additionally, RBC Capital believes the recent appointment of a new CEO and CFO may help improve investor confidence in the company, though the magnitude of any valuation re-rating will depend on Open Text’s post-divestiture organic growth. Management has been actively engaging in share buybacks, demonstrating confidence in the company’s future prospects. For deeper insights into Open Text’s valuation and growth potential, access the comprehensive Pro Research Report available on InvestingPro.

In other recent news, OpenText has announced several significant developments. The company joined the HPE Unleash AI partner program to enhance enterprise artificial intelligence adoption, integrating its Aviator AI solutions with HPE’s Private Cloud AI platform. A study by Canalys revealed that managed service providers using OpenText’s cybersecurity solutions can achieve up to 6.7 times return on investment. Meanwhile, Scotiabank raised OpenText’s stock price target to $35, citing projected cloud growth of 3%-4% for fiscal year 2026. In contrast, Jefferies downgraded the company’s stock rating to Hold, reducing the price target to $33, following leadership changes. OpenText appointed James McGourlay as Interim CEO after the departure of longtime CEO Mark Barrenechea. These leadership changes come after CFO Chadwick Westlake’s recent departure. McGourlay has been with OpenText for 25 years and previously served as Executive Vice President of International Sales.

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