UBS lifts Bechtle stock rating to Buy, raises target to EUR45.00

On Wednesday, UBS analyst Christopher Tong upgraded Bechtle AG (BC8:GR) (OTC:BECTY) stock rating from Neutral to Buy, setting a new price target of EUR45.00, an increase from the previous EUR37.50. The revision comes with a positive outlook on the company’s future performance, as Tong suggests that the first quarter of 2025 may represent the lowest point in Bechtle’s recent operations.

Tong’s optimism is rooted in several factors, including an anticipated reversal of the negative impact that Germany’s recession had on Bechtle in the past two years. He expects stabilization in the German government and economy to drive increased IT spending. Tong noted that Bechtle has already secured a record volume of framework agreements and that a nascent PC refresh cycle is expected to further support the company’s operations throughout the year.

The analyst pointed to the early signs of recovery, indicating that Bechtle’s orders in April saw a double-digit increase. Furthermore, Tong highlighted the potential benefits from the €500 billion German Infrastructure fund, which includes digitalization efforts and is expected to significantly boost Bechtle’s operations starting from 2026.

Tong also mentioned that the company could enjoy improved business sentiment even before the fund’s initiatives take full effect. The expectation of easy comparisons throughout the year adds to the positive forecast. Tong believes that the market has not fully priced in Bechtle’s growth prospects, with the stock trading 17% below its historical price-to-earnings ratio of 23 times.

The UBS analyst concluded by contrasting market expectations with UBS’s own estimates, pointing out that the market is pricing in a revenue compound annual growth rate (CAGR) of 5.9% from 2025 to 2029, whereas UBS estimates a CAGR of 7.7%. This discrepancy underscores UBS’s rationale for the upgrade and the increased price target for Bechtle stock.

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