LONDON, July 3, 2013 /PRNewswire/ --
Edison Investment research, a leading international investment research firm, announces the initiation of full coverage of GFT Technologies (ETR:GFT), a technology services and staffing business based in Stuttgart, Germany, specialising in the financial services sector.
Highlights of the analysis on GFT by Edison's Technology analyst, Richard Jeans, include:
GFT's core solutions business benefits from high levels of IT spending and complex business requirements in the financial services industry. It also benefits from favourable outsourcing trends in banking and has significant near-shore centres in Spain and Brazil. Edison estimates that two-thirds of revenues are recurring in nature.
The recent acquisition of Sempla creates a significant presence in Italy, boosts group margins and brings cross-selling opportunities. The strategy in Southern Europe is opportunistic, and potentially highly rewarding if the timing is right.
Edison is forecasting average annual sales and EPS growth of 12% and 50% respectively between 2012 and 2014. Growth is both organic, through expanding existing client relationships, and geographic via acquisition. Operating margin expansion from 4% to 6.8% is driven by the Sempla acquisition, the benefits of increased scale and near-shoring, and falling non-core expenses.
The stock trades on 0.4x FY14 revenues and 5.6x operating profit, which is significantly below its larger consulting peers on both measures. Edison's DCF model suggests a fair value of €6.53, 59% above the current level.
For the full report see:
All reports published by Edison are available to download free of charge from its website http://www.edisongroup.com.
About Edison Investment Research
Edison, the investment intelligence firm, is the future of investor interaction with corporates. Our team of over 100 analysts and investment professionals works with leading companies, fund managers and investment banks worldwide to support its capital markets activity. We provide services to more than 400 retained corporate and investor clients from our offices in London, New York, Berlin, Sydney and Wellington. Edison is authorised and regulated by the Financial Services Authority (http://www.fsa.gov.uk/register/firmBasicDetails.do?sid=181584).
Edison is not an adviser or broker-dealer and does not provide investment advice. Edison's reports are not solicitations to buy or sell any securities.
For more information please contact:
Richard Jeans Edison Investment Research +44-(0)20-3077-5700
Dan Ridsdale Edison Investment Research +44-(0)20-3077-5729
SOURCE Edison Investment Research