DASSAULT SYSTÈMES : JPMorgan upgrades recommendation to 'overweight
October 30, 2023 at 10:18 am
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On Monday, JPMorgan raised its recommendation on Dassault Systèmes shares to 'Overweight' from 'Underweight', with a price target revised upwards from 35 to 46 euros, representing a potential upside of around 20%.
In a research note, the intermediary explains that it has re-examined the dossier, which it now considers to be close to an inflection point with the return of "major contracts" for the 3D design software designer.
The analyst mentions the agreement recently signed with Jaguar Land Rover, which represents almost the same annual contribution as the one signed with Boeing, as well as partnerships sealed with General Motors and Apple.
In its study, JPMorgan also highlights the stock's clear underperformance since the start of the year, with a gain of 13% compared to an average increase of 25% for its comparables.
This observation leads JPMorgan to consider the stock's valuation as attractive, with a PER 2024 currently standing at 28x, far from its peak of 55x, i.e. a 10% discount to other software publishers specialized in design.
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Dassault Systèmes SE is the world leader in developing and marketing product life cycle management software. Net sales break down by family of products and services as follows:
- software (90.1%): product process optimization software and 3D design software for the following markets: general mechanical, automotive, aeronautics, consumer goods, electricity, and electronics, and factory design and naval construction. In addition, the group offers update and technical support services;
- services (9.9%): technological consulting and training services.
Net sales are distributed geographically as follows: France (15.1%), Germany (4.3%), Europe (10%), the United States (51.7%), Americas (0.9%), Japan (6.6%) and Asia (11.4%).