Berenberg upgrades Computacenter to 'buy'

(Sharecast News) - Analysts at Berenberg lifted their target price for Computacenter from 3,450p to 5,300p and upgraded the stock to 'buy' on Monday, arguing that the group was now well positioned to beat current profit expectations after a strongerthanexpected first half.

Berenberg said its revised stance followed Computacenter's H126 trading update, which pointed to a "strong" second quarter and adjusted pre-tax profits of around �163m - roughly double the �81.5m delivered in H125 and ahead of the �155m consensus.

Growth with hyperscale customers in North America remained a key driver across both technology sourcing and professional services, while the UK also delivered "excellent" momentum. Germany saw solid technology sourcing growth, though professional services remained subdued.

The German bank now expects a materially higher proportion of gross profits to drop through to operating profit, raising its gross profits forecasts by 4%, 5% and 6% for FY26-FY28, and liftinh adjusted operating profit estimates by 17%, 15% and 17%, respectively. For FY26, Berenberg now forecasts adjusted operating profits of �349m, implying 27.1% OP/GP conversion, compared with the 24.7% implied by prior consensus.

Berenberg added that management's longterm aim of achieving 30% OP/GP conversion supports its view that margins can continue to improve as North America and the UK maintain strong momentum and Germany gradually recovers.

Berenberg also flagged hyperscaler datacentre buildout as a key risk, though it noted that strength in nonhyperscale business lines in North America and the UK, alongside improving trends in Germany, provided some offset.

Computacenter currently trades on 18.2x FY26 P/E, added Berenberg.

Reporting by Iain Gilbert at Sharecast.com