Deutsche Bank Adjusts Outlook on Compugroup Medical SE, Cuts Price Target
In a recent development, Deutsche Bank has revised its outlook on Compugroup Medical SE (COP:GR) by lowering the price target to €20.00 from the previous €31.00. Despite this adjustment, the firm has decided to maintain a Hold rating on the company's shares. This decision comes in the wake of Compugroup's disappointing second-quarter results pre-release and a significant reduction in their full-year 2024 guidance.
The company's performance has been adversely affected by lower-than-expected non-recurring revenues, especially from larger projects in the Ambulatory Information Systems (AIS) and delays in revenues related to the French Ségur initiative, which are now expected to start in 2025 instead of 2024. Furthermore, the Health Information Systems (HIS) segment is experiencing slower revenue recognition from projects under the German Hospital Future Act (GHFA), which is limiting the company's organic growth for the year.
Deutsche Bank had previously hinted at potential pressure on the full-year 2024 guidance in a downgrade note. However, the extent of the guidance reduction announced by Compugroup has taken the firm by surprise. The revised forecast and the subsequent adjustment of the price target highlight the challenges faced by the company in meeting its expected financial performance.
The downgrade in guidance and the price target adjustment underscore the difficulties Compugroup is currently facing, particularly in its project-based revenue streams.
In conclusion, investors should take note of Deutsche Bank's revised outlook on Compugroup Medical SE and carefully consider the implications of the company's performance issues on their investment decisions. It is crucial to stay informed about such developments in the financial markets to make well-informed investment choices.