Berenberg lowers target price on GB Group

(Sharecast News) - Analysts at Berenberg lowered their target price on software firm GB Group from 340p to 290p on Thursday following the group's full-year trading update a day earlier.

Berenberg said GB Group's FY26 trading update saw the firm deliver revenues and operating profits in line with market expectations, but also noted that while the second half of the year saw a year-on-year acceleration in growth, this primarily reflected "a soft comparative performance" in H225.

However, Berenberg highlighted that GB Group now expects year-on-year revenue growth to accelerate to mid-single digits in FY27, which, if achieved, "would provide some reaffirmation of the significant strategic initiatives" brought in by chief executive Dev Dhiman since he began the job in January 2024.

"We marginally reduce our EPS expectations and lower our price target to 290p (from 340p), which primarily reflects a higher WACC of 10.6%," said the German bank, which kept its 'buy' rating on the stock.

Berenberg added that GB Group trades on an 11.4x FY26 price-to-earnings ratio and a 10.7x FY27 price-to-earnings ratio.

Reporting by Iain Gilbert at Sharecast.com

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