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magazineComputacenter could beat earnings forecasts
COMPUTACENTER (CCC) £17.98
Gain to date: 48.5%
Original entry point: Buy at £12.10, 2 May 2019
The prospects for FTSE 250 IT re-seller Computacenter (CCC) just get better and better, and this is being reflected in a big rally in the shares.
The US arm has turned a corner, Germany is strong and the UK is making margin progress.
Heading into the current year, structural tailwinds look set to persist with more organisations eyeing the cost efficiencies and service opportunities from adaption to the digital world, which is just where Computacenter’s experience and expertise can help.
Its software re-sales are from proper blue-chip vendors, such as Microsoft, Oracle, Adobe, Cisco, Symantec and the UK’s own Sophos (SOPH).
Management are notoriously conservative when giving guidance which implies increasingly significant chances of the business doing better than expected through 2020 and beyond.
‘We are now much more confident about the company’s long-run growth outlook,’ note analysts at investment bank Berenberg, who now see the share price rallying up to £21.50 in the next 12 months, versus the previous £15 target.
This is backed by what they regard as a material discount – Computacenter is valued at 13% below global peers and 22% below European rivals.
SHARES SAYS: Prospects look bright and earnings could well beat 94.5p per share estimates for 2020. Still a buy.
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