Berenberg Lowers Price Target on Sopra Steria Group Stock to €232 - Is It Time to Buy?
In a recent update, Berenberg adjusted its price target on Sopra Steria Group (SOP:FP) (OTC: SPSAF) stock, lowering it to €232 from €238 while maintaining its Buy rating. This change comes after the completion of the sale of the Sopra Banking Software (SBS) business to Axway, which brought in over €410 million in cash inflow for Sopra Steria.
Despite a slowdown in organic growth in the first half of 2024 and a subsequent profit warning, Berenberg remains positive about the company's future. The analyst highlighted Sopra Steria's efforts to revamp its operating model through initiatives like Sopra Steria Next and skill center expansions.
While the company's low valuation multiples are a positive factor, adjustments to free cash flow estimates led to the price target reduction. The sale of the SBS business is seen as a strategic move that could improve Sopra Steria's operational performance in the long run.
Overall, Berenberg's updated price target reflects a balanced view of the recent challenges faced by Sopra Steria and the potential for future growth. Investors may want to consider these factors before making any decisions on buying or selling Sopra Steria stock.
In conclusion, despite recent setbacks, Sopra Steria's strategic moves and financial flexibility could pave the way for improved performance in the future. It's essential for investors to stay informed about these developments and consider their impact on the company's outlook and stock value.