On Friday Bank of America reiterated its buy recommendation and €40.7 target price for Dassault Systèmes, even though it considers the targets unveiled by the enterprise software designer at its investor day to be "still (too) high."
The analyst noted that the French group announced this morning at the start of its Capital Markets Day that it plans to double its EPS from €1.2 per share in 2023 to €2.4 by 2029.
In its note, BofA highlights this as an "ambitious" target, as it is 9% higher than the average consensus forecast.
While acknowledging that generative AI should drive the technology company's business, the broker also believes that its revenue growth estimates are "unrealistic."
While Dassault Systèmes has stated that it is targeting average annual growth of around 10% for its business over the period 2023-2028, the analyst expects growth of around 8.5% for 2025-2028.
Bank of America, which admits that it would have preferred to see more credible targets, nevertheless believes that the potential for accelerated growth in the medium term, combined with an attractive valuation (a 20% discount on its ten-year multiples), could well support the share price.
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Dassault Systèmes SE is the world leader in developing and marketing product life cycle management software. Net sales break down by family of products and services as follows:
- software (90.3%): product process optimization software and 3D design software for the following markets: general mechanical, automotive, aeronautics, consumer goods, electricity, and electronics, and factory design and naval construction. In addition, the group offers update and technical support services;
- services (9.7%): technological consulting and training services.
Net sales are distributed geographically as follows: France (15.9%), Germany (4.9%), Europe (10.8%), the United States (48.9%), Americas (1.2%), Japan (6.4%) and Asia (11.9%).
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