On Wednesday, Berenberg issued a downgrade for Bechtle AG (BC8:GR) (OTC: BECTY) stock, changing its rating from Buy to Hold, accompanied by a reduction in the price target from EUR52.00 to EUR39.00. This adjustment follows Bechtle's announcement on October 22 of its second profit warning for the year. The company, which had previously reaffirmed its adjusted guidance during a capital markets day, has now retracted its expectation of matching the previous year's business volume, revenue, earnings, and EBT margin.
Bechtle's management has expressed that due to the current low visibility, it is unable to provide a new forecast for the remainder of 2024. The lack of a clear outlook comes after the company's shares have already experienced a significant decline, falling 24% year-to-date. The analyst from Berenberg noted that with the uncertain sales growth and margin outlook for Bechtle, the shares are likely to face challenges in achieving a higher valuation from their current levels.
The report also highlighted a downward revision in earnings per share (EPS) estimates for Bechtle, with an average cut of approximately 11% extending out to the year 2026. The combination of lowered EPS forecasts and the absence of a new financial outlook from Bechtle has contributed to the analyst's decision to downgrade the stock.
The reduction in the price target to EUR39.00 from the previous target of EUR52.00 reflects a more cautious view of Bechtle's fiscal health and potential for growth in the near term. This new target represents the analyst's adjusted expectations for the stock's performance in light of the recent developments and the company's revised financial stance.
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