UBS has upgraded its rating for Computacenter PLC (LON:CCC) to ‘buy’ from ‘neutral’ as it thinks the stock’s value looks attractive as cross-selling from its acquisition of US firm FusionStorm last September ramps-up.
The Swiss bank also raised its target price for the FTSE 250-listed firm to 1,450p from 1,080p, with the shares currently trading at 1,232p.
READ: Computacenter rises as revenues top £4bn in 2018
In a note to clients, UBS’s analysts said: “We expect the shares to re-rate, closing a recently-widened gap to peers as the topline re-accelerates in H219.”
They added: “We are also optimistic on the sustainability of growth in supply chain as the FusionStorm acquisition brings new relationships with high-growth cloud providers, including two members of the FAANGs.”
The UBS analysts pointed out that since 2013, Computacenter's share of supply chain activities has risen from 38% to 40% as its workplace share fell from 38% to 30%, and they think the FusionStorm purchase will accelerate this shift.