SRH AlsterResearch AG Update: CompuGroup Medical SE - Reaction to Q1 results overdone; PT up; Upgrade to BUY

CompuGroup SE (Update) Technology MCap EUR 3.5bn BUY, PT EUR 72.00 (+11% potential) Research_update CompuGroup reported a mixed start to 2021, with Q1 revenues supported by organic and inorganic growth. In the conference call, all eyes were on margins as well as capital expenditure, which is assumed to be in the range of EUR 70m – EUR 80m in FY 2021. Current market expectations of declining margins are not reasonable from our perspective. To the contrary: expected synergies from recent acquisitions plus the company’s additional investments to tap digitization opportunities in the healthcare sector should drive organic growth and attractive EBITDA margins going forward. Group targets are completely in line with our initial expectations (see start coverage on research-hub.de). We maintain our view on CGM and updated our CAPEX assumptions after a discussion with the company (eAR: EUR 73m in 2021). As a result of lower CAPEX assupmtions, we slightly increased our DCF-based price target to EUR 72.00 (EUR 70.00) and changed our recommendation from HOLD to BUY. Upside potential stands at 11%. BUY on unjustified share price weakness. For 5 current investment ideas, check our Weekly Screener. This week we are looking for our all time favourite companies in our weekly screener history Please note that AlsterResearch publishes MiFID II compliant research only. For a detailed discussion on MiFID II, please visit https://www.research-hub.de