Softcat: Solid Outlook Priced In, Sector Headwinds Justify Hold Rating

Jefferies analyst Charles Brennan maintained a Hold rating on Softcat today and set a price target of p1,500.00.

Charles Brennan has given his Hold rating due to a combination of factors, notably that Softcat’s first-half performance and upgraded full-year guidance are already largely reflected in the revised numbers. The company posted substantially stronger gross profit and EBIT than the market had anticipated, and management lifted full-year EBIT growth expectations from low to high single digits, but much of this upside stems from orders already in the backlog and some demand being pulled forward.

At the same time, Brennan notes that the share price looks depressed, yet this is a condition shared across much of the sector, limiting the scope for a company-specific rerating in the near term. With a sizeable portion of the order book already shipped and the remainder expected to support the second half, the outlook appears solid but not transformational, leading him to see a more balanced risk‑reward profile that justifies maintaining a Hold rather than moving to a more decisive stance.

Brennan covers the Technology sector, focusing on stocks such as Computacenter, Nemetschek, and SAP SE. According to TipRanks, Brennan has an average return of 8.9% and a 58.87% success rate on recommended stocks.

In another report released today, TipRanks – Anthropic also initiated coverage with a Hold rating on the stock with a p1,248.00 price target.