Cautious Outlook: Dassault Systemes’ Ambitious EPS Growth Targets Raise Concerns

Analyst Charles Brennan of Jefferies maintained a Sell rating on Dassault Systemes (0HB4 – Research Report), retaining the price target of €28.00.

Charles Brennan has given his Sell rating due to a combination of factors surrounding Dassault Systemes’ recent financial targets and historical performance. The company extended its mid-term targets to fiscal year 2029, suggesting a gradual increase in growth that is heavily weighted towards the later years. This adjustment implies a 15% compound annual growth rate (CAGR) in earnings per share (EPS) from 2025 to 2029, which is significantly higher than the approximately 9% CAGR Dassault Systemes has achieved over the past decade.
Additionally, while the extension to FY29 lowers the EPS CAGR from 15% to 12% for the period from 2023 to 2029, the growth rate for 2025 to 2029 remains at 15%. Historically, Dassault Systemes has achieved an EPS CAGR of 11% from 2017 to 2025, but a substantial portion of this growth—30%—was due to reduced tax charges. Without these tax benefits, the growth rate would have been closer to 9%, raising concerns about the company’s ability to meet its ambitious new targets.