Report
Software: As Software stocks have faced strong volatility since November 2021 due to rising inflation, geopolitical tensions and potential economic downturn, we conducted a review of the potential impact of these headwinds and threats to th
SoftwareAs Software stocks have faced strong volatility since November 2021 due to rising inflation, geopolitical tensions and potential economic downturn, we conducted a review of the potential impact of these headwinds and threats to this industry. While software firms have proven increased resilience during periods of economic slowdown or crisis, we deem Sage, SAP and Software AG are supposed to better resist to an economic shock. Given cheap valuation in comparison to EBITDA margin improvement potential, we have upgraded CompuGroup to Buy from Neutral. Conversely, rich valuation multiples given current uncertainties have pushed us to downgrade Dassault Systèmes and Materialise to Neutral from Buy.
Rising interest rates, inflation and geopolitical tensions drove down Software valuation multiples
Upgrading CompuGroup to Buy, downgrading Dassault Systèmes and Materialise to Neutral
Software vendors have proven better resilience during economic slowdown
Industry and geographic exposure is pretty well balanced
Cost inflation vs. pricing: negligible headwinds
Very limited exposure to Russia, Belarus and Ukraine
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Bryan Garnier
Since 1996, Bryan, Garnier & Co has been growing with an absolute conviction that the investment banking landscape would experience a major revolution: most of the large local generalist banking groups will disappear to the benefit of a handful of global powerhouses, and an emerging group of independent, highly specialised boutique investment banks.
Gregory Ramirez
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