TietoEVRY (Sell, TP: EUR17.00) - Unfavourable risk/reward ahead of Tech services review conclusion
With the stock having held up well despite a material miss on Q2 adj. earnings, we find the risk/reward unattractive ahead of the conclusion of the Tech services strategic review due in the next few months potentially posing downside risk beyond our below-consensus earnings estimates. We therefore reiterate our SELL and have cut our target price to EUR17 (19).Tieto is an IT services company in the Nordics providing full lifecycle IT services. The reportable operating segments in service line dimension are Managed Services, which is an IT infrastructure and cloud provider that provides enterprise platform services and end user solutions; Consulting and System Integration, which provides consulting and system integration services, application management and transformation consulting; Industry Products, which provides industry-specific software products and productized solutions; and Product Development Services, which provides services in the field of communications and embedded technologies for a global customer base.
DNB Markets is the investment banking arm of DNB Bank ASA and is focused primarily on the Nordic region, as well as internationally on niches such as global shipping, energy and related services, and seafood. DNB Markets offers services in FICC, Equities and Investment Banking advisory from offices in Oslo, Stockholm, London, Singapore and New York. Equity research coverage is offered on c250 Nordic companies. DNB was ranked no.2 in Extel Nordic Research 2017. The DNB Markets’ Credit and FICC Macro & FX Research teams are repeatedly highly rated by Prospera Nordic Institutional Investor Surveys.
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