Berenberg cuts target price on Bytes Technology following FY results

(Sharecast News) - Analysts at Berenberg lowered their target price on software and services firm Bytes Technology from 390p to 360p on Wednesday following the group's in-line FY26 results a day earlier.

Berenberg highlighted that Bytes had delivered headline financial metrics that were as expected by the market and had retained its FY27 guidance for high-single-digit/low-double-digit gross profit growth and flat year-on-year operating profits.

Entering 2027, Berenberg noted that Bytes has moved past the year-on-year impact of Microsoft's changes to its partner incentives, with first half comparatives "much less challenging" than those faced in H226.

However, Berenberg also noted that there were "a number of significant changes to the company's operations" that its thinks need "further time to bed in".

"We increase our gross profit forecasts by 2%, 2% and 3% in FY27, FY28 and FY29 respectively, and lower our reported operating profit forecasts by 7% in each of FY27, FY28 and FY29," said the German bank, which reiterated its 'hold' rating on the stock.

Berenberg added that Bytes currently trades on 15.7x FY27 price-to-earnings ratio and a 7.6% FY27 FCFF yield.

Reporting by Iain Gilbert at Sharecast.com