Softcat (SCT – Research Report), the Technology sector company, was revisited by a Wall Street analyst today. Analyst Charles Brennan from Jefferies maintained a Sell rating on the stock and has a p1,385.00 price target.
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Charles Brennan has given his Sell rating due to a combination of factors impacting Softcat’s future growth prospects. While the company has upgraded its FY25 guidance due to larger deals, this creates a challenging comparison for FY26, making it difficult to sustain growth at the same rate.
Additionally, Softcat is currently trading at a premium compared to similar growth companies like Sage and Bytes, which suggests that there might be better investment opportunities available elsewhere. The recent trading statement indicates strong growth in gross and operating profits, but the anticipated low-teens growth in operating profit may not be sustainable in the long term, leading to a cautious outlook.
In another report released on May 20, Kepler Capital also maintained a Sell rating on the stock with a p1,800.00 price target.