TietoEVRY’s Strategic Shift: Hold Rating Amid Uncertain IT Demand and Valuation Concerns

TietoEVRY (0KG0 – Research Report), the Technology sector company, was revisited by a Wall Street analyst today. Analyst Mark Hyatt from Morgan Stanley downgraded the rating on the stock to a Hold and gave it a €21.50 price target.

Mark Hyatt has given his Hold rating due to a combination of factors surrounding TietoEVRY’s recent strategic decisions. The company has announced the sale of its Tech Services business, which marks the conclusion of a strategic review that began over two years ago. This move is expected to refocus the company towards software and digital engineering, potentially leading to a more agile and higher-quality business profile. However, the full benefits of this transition are not expected to materialize immediately, as the transaction is set to close in the third quarter of 2025 and the broader IT demand environment remains uncertain.
Despite the potential for higher growth and margins post-sale, the current valuation of TietoEVRY is not particularly compelling when compared to its peers. The stock is trading at a valuation that is less attractive relative to similar companies, and with the macroeconomic environment remaining subdued, immediate positive catalysts for the stock are unlikely. Consequently, Hyatt has opted for a neutral stance, reflected in the Hold rating, with a slightly reduced price target of €21.50.

In another report released on March 24, Kepler Capital also maintained a Hold rating on the stock with a €17.00 price target.