UBS has raised its price target on Computacenter PLC (LSE:CCC) by 33% to 7,000p, arguing the IT reseller's shares still have further to run despite an 81% gain so far this year.
Analysts Christopher Tong, Michael Briest and Jarrod Chisholm reiterated their Buy rating in a note dated 4 September, with shares trading at 5,370p.
The shares were up 3% at 5,515p in early trading.
UBS also lifted its 2026 pre-tax profit forecast by 1% to £350 million and its 2027 forecast by 16% to £423 million, both ahead of consensus.
It said the scale of Computacenter's growth drivers, including a German rebound, hyperscaler capital expenditure and a hardware refresh cycle, remains underappreciated by the market.
Hyperscale and adjacent customers accounted for around 10% of group gross profit in 2025, a share UBS expects to rise to 16% this year and 25% in 2027.
The broker pointed to one key Computacenter customer, SpaceX, which could stand up nearly five times more computing capacity in 2027 than in 2026.
UBS cited SpaceX management comments that current economics have produced a payback period of less than a year on new compute capital, addressing concerns about returns on such investment.
In Germany, which made up 47% of Computacenter's 2025 earnings before interest and tax, UBS expects growth to accelerate in the second half as public sector spending picks up.
The broker expects Germany's infrastructure fund, worth roughly four billion euros a year, to feed through into 2027 results, with Computacenter well placed in the public sector.
UBS raised its enterprise value to net operating profit after tax multiple to 22 times, from 18 times previously, reflecting a higher premium against peers.
The broker lowered its assumed cost of capital to 8.3%, from 9%, citing a lower beta driven by stronger end markets and more consistent execution.
UBS argued there is no reason Computacenter should trade below rival Softcat, given its faster forecast growth and greater exposure to both artificial intelligence spending and the German market.
The new target implies a 25 times price-to-earnings multiple on UBS's 2027 forecasts, with the broker citing scope for further upward revisions to consensus estimates.
UBS's downside scenario of 3,500p assumes slower growth from tougher comparatives and increased competition in tendering, against an upside case of 8,500p if share gains at key hyperscale customers continue.
