On Thursday, BNP Paribas (OTC:BNPQY) Exane reinstated coverage on Lectra (EPA:LECS) (LSS:FP) stock, a technology company specializing in software, CAD/CAM equipment, and associated services for industries using soft material such as fabric, leather, technical textiles, and composite materials. The firm assigned an Outperform rating to the company's shares, accompanied by a price target of EUR35.00.
The analyst from BNP Paribas Exane expressed enthusiasm about Lectra's strategic pivot towards a more stable and profitable business model, emphasizing the company's shift to recurring-revenue streams and Software (ETR:SOWGn) as a Service (SaaS). This transition is expected to mitigate volatility and enhance overall profitability.
Despite acknowledging potential challenges due to macroeconomic factors and uncertainties in order intake momentum, the analyst believes these issues are already reflected in the current consensus estimates and valuation multiples. This perspective suggests that the market has incorporated these headwinds, potentially offering an attractive risk-reward balance for investors.
The reinstated coverage with an Outperform rating indicates a positive outlook on Lectra's stock, with the price target of EUR35.00 signaling confidence in the company's future performance.
Lectra's strategic focus on recurring revenue and SaaS is part of a broader trend in the technology sector where companies seek to build more predictable and stable revenue streams, which can lead to improved valuations and investor sentiment. The new price target represents a milestone for the company as it continues to evolve its business model in response to industry demands and market conditions.
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