On Monday, Bechtle AG (XETRA:BC8) (OTC:BECTY) stock experienced a downgrade in its stock rating from 'Neutral' to 'Underperform' by Exane BNP Paribas (OTC:BNPQY). The firm also reduced the price target from EUR48.00 to EUR38.00. The revised target suggests a valuation of 11 times the estimated 2025 enterprise value to earnings before interest and taxes (EV/EBIT).
Exane BNP Paribas cited a series of factors influencing their decision, including an anticipated sluggish growth for Bechtle in the near term. The firm also mentioned potential decreases in OEM bonus and marketing payments that could further impact the company's margins.
The firm's analysts have adjusted their earnings per share (EPS) estimates downwards by 5% and 6% for the fiscal years 2024 and 2025, respectively. This adjustment places their estimates approximately 4% below the consensus EPS. The analysts acknowledge Bechtle's high quality and competent management, but believe that the slower growth outlook justifies a lower valuation.
Despite a valuation that is not demanding compared to historical levels, Exane BNP Paribas argues that the expected slow pace of growth for Bechtle supports their decision for a rating downgrade and a reduced price target.
Bechtle AG, a German IT company, is now faced with a more conservative outlook from Exane BNP Paribas, reflecting caution over the firm's growth trajectory and potential margin pressures in the coming years.
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