Computacenter Shares Rise on Berenberg Upgrade, Higher Profit Forecast

Shares in Computacenter PLC (LON:CCC) rose on Monday after analysts at Berenberg upgraded the IT services provider to "buy" from "hold," citing a stronger-than-expected profit outlook driven by robust demand in key markets. The brokerage significantly raised its price target on the stock, pointing to improved operating leverage and strong performance.

Analyst Upgrade Drives Stock Higher

Berenberg raised its price target on Computacenter to 5,300 pence from a previous 3,450 pence, representing a more than 53% increase. The firm's more constructive stance is based on the view that the company is well-positioned to outperform current market profit expectations.

In response to the upgrade, Computacenter shares climbed 3.6% to 4,746 pence in London trading. The stock's performance stood in contrast to the broader market, with the FTSE 100 index slipping 0.3% during the same period.

Strong Trading Update Underpins Outlook

The upgrade was prompted by Computacenter's recent first-half trading update, which indicated a stronger profit trajectory than analysts had anticipated. Berenberg highlighted several positive drivers in its note to clients, including:

Ad

• Stronger-than-expected demand from hyperscale customers in North America.
• Robust growth in the company's UK operations.
• Improving business trends in Germany.

Computacenter's management now expects first-half adjusted profit before tax to reach approximately £163 million, comfortably above the consensus estimate of £155 million. The company also stated that its full-year performance is expected to be "comfortably ahead" of market forecasts.

Revised Forecasts and Key Risks

Reflecting the improved outlook, Berenberg substantially increased its earnings estimates. The brokerage now forecasts Computacenter's 2026 adjusted operating profit will be £349 million, well above the prior consensus of about £318 million. The analysts attributed this to stronger operating leverage, as a greater share of gross profit flows through to earnings.

While Berenberg sees potential for further upside, it also identified a potential slowdown in spending from hyperscale data center clients, particularly Meta, as the primary risk to its investment case.