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Investing.com - UBS raised its price target on Softcat Plc. (LON:SCT) to GBP14.50 from GBP14.00 on Wednesday, while maintaining a Sell rating on the IT infrastructure provider.
The price target adjustment follows Softcat’s recent financial results, which UBS described as "strong but largely expected" given the company’s previous pre-announcement. Softcat reported fiscal year gross profit growth of 18% and adjusted EBIT growth of 17%, significantly boosted by large deals in the second half.
Softcat has reiterated its guidance for high-single-digit gross profit growth and low-single-digit adjusted EBIT growth for fiscal year 2026. Management indicated that underlying EBIT growth will be weighted toward the first half at approximately mid- to high-single digits, supported by additional large deals during that period.
UBS noted that Softcat has signaled potential expansion into the U.S. market through acquisition, which would mark a significant strategic shift for the company whose profits are currently generated almost entirely in the United Kingdom. This follows Softcat’s first bolt-on acquisition earlier this year.
The investment bank suggested that a U.S. acquisition would likely receive a positive market reaction due to the substantial increase in Softcat’s total addressable market, though UBS indicated that the company appears to be in the early stages of evaluating potential targets.
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