Software AG: Q1 13 conference call feedback: timing not right yet for an upgrade
SELL, Fair Value EUR28 vs. EUR30 (+2%)
We reiterate our Sell rating and cut our DCF-derived fair value to EUR28 from EUR30. We reduce our sales forecasts by 2% and our adj. EPS ests. by 4-5% as the surge in BPE expenses in Q1 13 had more impact on the margin than what we thought, while ETS sales were below our forecasts. We still deem Software AG is unlikely to return to positive organic growth before Q4 13, and consider it is too early to bank on 2018 targets as long as we do not have better economic or sales momentum.
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