LONDON (dpa-AFX) - After share price losses in the third quarter, the British investment bank Barclays sees several European software and IT stocks supported by increasingly attractive valuations. According to analyst James Goodman, this is particularly true for measurement technology and geoanalytics specialist Hexagon and construction software provider Nemetschek.

However, the earnings potential for the majority of the shares is limited in view of the continuing difficult economic environment, according to a sector study published on Tuesday. Therefore, Goodman only upgraded the two shares from "Underweight" to "Equal Weight". He left the price targets at 100 Swedish kronor and 60 euros, respectively. He thus grants Nemetschek a potential of around two percent based on Monday's closing price - which the share exploited on Tuesday.

After a decent first half of the year, rising interest rates and the fading hype surrounding artificial intelligence (AI) have weighed on technology stocks worldwide, Goodman explained. Hexagon was the worst hit in Europe, but Dassault, Nemetschek and Amadeus also saw double-digit percentage declines.

At Nemetschek, the analyst now noted a more resistant market environment. The headwind from the second quarter, caused for example by orders being brought forward, should no longer have such a strong impact on the third quarter, which Nemetschek will report on October 26.

Goodman does expect another weak quarter. But the expected acceleration of growth in the final quarter and the outlook for 2024, which is not as bad as feared, make the ratio of opportunities to risks appear more balanced. He also assessed the risks to the double-digit percentage increase in sales targeted for the current year as lower than originally thought.

For Teamviewer, the expert raised the earnings estimates due to the announced end as main sponsor with the English soccer club Manchester United. He raised the price target from 17 to 18 euros, which implies a potential of almost 14 percent on yesterday's closing price. The securities of the remote maintenance software specialist continue to be rated "Overweight", as do those of SAP.

In line with the "Equal Weight" rating, the analysts at Barclays Capital expect the share to develop more or less in line with the other stocks in the sector under review over the next twelve months. In the case of "Overweight", the analysts expect an above-average development compared to the sector./gl/tih/jha/

Publication of the original study: 02.10.2023 / 14:57 / GMT First disclosure of the original study: 03.10.2023 / 04:10 / GMT

Analyzing Institute Barclays Capital.