Sopra Group: Feedback from company visit: raising the bar
BUY, Fair Value EUR75 vs. EUR70 (+9%)
We reiterate our Buy rating and raise our DCF-derived fair value to EUR75 from EUR70 on more optimistic mid-term WCR assumptions (1% of sales vs. 4% = EUR5), after we visited the company last week. H2 2013 looks well oriented, the plan to boost HR Access’ margin to 15% is credible in our view, while a new wave of service industrialisation is expected to keep Sopra afloat for winning larger deals. Finally, a disposal of Caravelle’s 17% stake in Sopra may lead to a free float increase.
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