Software AG: Feedback from company contact: positive catalysts are still there
BUY, Fair Value EUR30 (+13%)
We reiterate our Buy rating and our DCF-derived fair value of EUR30 following a contact with the company last week. A change in our fx assumptions and higher opex due to an aggressive sales recruitment activity and recent acquisitions have a minor negative impact to our EBIT margin assumptions in our view. Positive catalysts on Software AG remain the same: 1). Positive momentum in Business Process Management; 2). Return to organic growth foreseeable from Q4 13; 3). Projected margin trends priced in; 4). Current valuation that does not reflect Software AG’s repositioning.
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