ShareCrazy.com: Hard Data, Harder Opinion

Date	Comment
17-08-10	17.08.10 :+1.5, (113.5) Canaccord Genuity cuts Micro Focus International price target to 326p from 510p. Says the company's interim management statement identifies sales execution issues. Cuts '11 Ebitda forecast by 9% to $182M. However, thinks the market has over-reacted, with the shares falling by 35% since the trading update. Says the current share price is factoring in another profit warning which leaves room for upside. Does not expect the shares to recover their premium rating in the near term, but says the shares should trade at least in line with peers Logica (LOG.LN) and Misys (MSY.LN). Keeps Micro Focus at buy.
11-08-10	11.08.10 :-4.1, (112.7) JPMorgan Cazenove raises Logica price target to 100p from 95p. Revenues and profits outperformed slightly in 1H and despite weak cash conversion, says the raised dividend suggests more confidence. However, JPMorgan continues to think public sector work in the UK and Benelux will be weak in 2H. JPMorgan also has concerns over Logica's offshore resources and whether they can be priced competitively in private sector outsourcing deals. Underweight.
09-08-10	09.08.10 :+0.3, (118.9) UBS raises Logica price target to 140p from 133p. Says the company shows a return to year-on-year growth, albeit fractional, in 2Q. Says it's the first of the peer group in UBS coverage to report YOY growth since 4Q '08. Raises '10 EPS forecast to 12.25p from 11.53p and '11 to 12.82p and 11.77p. Expects investors to remain nervous on public sector risks ahead of the government's spending review results in October. Says: "However, with 55 separate clients in the UK public sector, Logica would be very unlucky if it were to suffer a catastrophic collapse in activity." Keeps buy.
06-08-10	06.08.10 :+3.1, (116.1) Logica PLC said net profit more than tripled as contract wins in France and Germany offset falling profit and revenue in the U.K. where the coalition government is reining in public spending. Logica, which provides consulting, outsourcing and information technology services to governments and companies in Europe, said it expects improving trends to continue in Europe and reiterated its full-year outlook, sending its shares to the top of the FTSE 250 leader board. "Gradually improving market trends underpin our view that revenues and adjusted operating margin for the full year will be at a similar level to 2009," Chief Executive Andy Green said. The company also aims to increase adjusted operating margin to 10% in the medium term, from 6.7% in the first half. Revenue in the six months to the end of June fell to GBP1.87 billion from GBP1.88 billion a year earlier, but second quarter revenue was flat, underpinning confidence for "modest growth" in the second half. Revenue in France, northern and central Europe and Sweden all rose more than 4% in the second quarter. In France, government contract wins and a change in tax legislation boosted first-half adjusted operating profit by 31%to GBP34 million, while northern & central Europe posted a 4% rise in adjusted operating profit to GBP26 million. Logica won 19 contracts in the first half of 2010, adding Posten Norden, AMF and Lantmannen and Scan to its client list. That compares to seven contract wins a year earlier. However, in the U.K. where Logica has contracts with various government departments including the space agencies, the Ministry of Defense and the police, adjusted operating profit fell 10% to GBP26 million. In June, the U.K.'s Chancellor of the Exchequer George Osborne announced a fiscal tightening that will see new spending cuts and tax increases of GBP40 billion by the end of the five-year parliament term. These savings are in addition to more than GBP73 billion of cuts set by the previous government. Still, the U.K. public sector accounts for less than 10% of Logica's total revenue. First-half net profit rose to GBP67.7 million for the six months to June 30 from GBP21.2 million a year ago as orders rose 2% to GBP2.14 billion. Stripping out exceptional items, adjusted operating profit--one of the key figures U.K. analysts track--fell 1.6% to GBP125 million from GBP127 million a year earlier, in line with market expectations, hurt by the difficult economic environment. Logica declared an interim dividend of 1.9 pence a share, up from 1 pence a year ago, with the group forecasting a steady increase in its dividend payout ratio to at least 40% by 2012.
06-08-10	06.08.10 :+3.1, (116.1) Logica stock +4.8% at 114.6p, climbing after it reiterates its full-year outlook due to improving trends in Europe, although it reports a slight fall in first-half profit and revenue. Still, KBC Peel Hunt keeps a sell rating, saying first-half cashflow is weak, driven by a substantial working capital outflow. It adds that net debt is consequently higher and the company has missed its target net debt/Ebitda ratio.
06-08-10	06.08.10 :+3.1, (116.1) Logica's 1H results are a shade ahead of expectations says an analyst. Says new orders total GBP2,142M in the 1H and book-to-bill is at 114% reflecting the strength in the outsourcing business. Says the company is seeing modest growth in 2H and remains positive about the prospects for the European public sector business in the medium term.
27-07-10	27.07.10 :+0.3, (102.4) Goldman Sachs downgrades Logica to sell from neutral and cuts target price to 110p from 145p. Says the stock has the lowest upside potential in Goldman's coverage universe, and the brokerage is 5%, 16% and 22% below 2010-12 EPS consensus respectively. This "in our view does not capture the top-line risks from UK public sector spending cuts and structural decline in margins owing to the group's non-scalable offshore model," adds Goldman. Brokerage says it continues to advocate owning structural winners and remains buy rated on Capgemini (CAP.FR) due to its global scale and established offshore model.
23-07-10	23.07.10 :+1.1, (105) JPMorgan Cazenove lowers Logica to underweight from neutral. Says this comes in the face of possible reductions in public sector spending (32% of group revenues and 62% of UK revenues), "as well as the company's potentially insufficient offshore resources to make them price competitive in commercial outsourcing bids." Brokerage adds that: "We are concerned that the company may reduce guidance at its 1H results on August 6." Has a 95p target price.
19-07-10	19.07.10 :+0.1, (108.7) Panmure Gordon lowers Logica target price to 163p from 168p. Says that European IT services companies are not dogged by the negatives (increased attrition and wage bills dampening margins) of their offshore rivals, and Logica should also benefit from on/off stories about M&A. "While we expect Logica's interim results to be in line, it can only be cautious about the outlook in the UK public sector - that said, Logica is very well-placed in our view to reduce prices by 20% using a mix of labour arbitrage, service levels, standardisation and shared services," adds brokerage. Has a buy rating.
29-06-10	29.06.10 :-0.8, (109.2) UBS upgrades Logica (LOG.LN) to buy from neutral on valuation grounds. Notes the stock has underperformed peers as concerns regarding its public sector exposure have plagued the stock since the UK general election. Thinks Logica has a fairly "typical" group exposure to the public sector, of 33%. Also thinks its UK government exposure is in line with peers, at 62% of UK sales and 13% of group sales. Adds risks undoubtedly exist, but these are more likely to hit in '11. Maintains 133p price target.
14-06-10	14.06.10 :-1.8, (121.2) UBS lowers Logica target price to 134p from 155p. Says investor concern is rightly focused on the possibility of severe cuts in European public sector spending (with a particular focus on Holland and the UK), along with the risks that corporate IT expenditure suffers as corporate confidence is dented by fears over sovereign debt and the deteriorating euro. "Last week at its analyst day, Capgemini (CAP.FR) highlighted these risks, and with 33% of Logica's sales coming from the public sector (13% from UK), we expect it too to acknowledge the risks," adds UBS. Has a neutral rating.
28-05-10	28.05.10 :-0.6, (126.7) Logica PLC (LOG.LN) is in talks with the U.K.'s new coalition government on how to improve operational efficiency within the public sector and cut costs, a company executive said. Logica is "making a series of proactive proposals to the government about how we can help assist with some of the cost savings that they need to get on with," U.K. Chief Executive Craig Boundy told Dow Jones Newswires. Logica, a FTSE 250 company with a market value of about GBP2.03 billion, generates 62% of its U.K. revenue from the local public sector. Boundy declined to detail some of the proposals, saying they were at an early stage, but said the government will need to share services between various parts of different departments, for example payroll, where Logica is already active. "We charge a price per payroll slip, so it makes it very easy for multiple departments to take advantage of the service, and to get a very good, cost-effective service," he said. "In the shared service environment, I can see a lot of benefit that we can bring by combining some of their people, our people and some of the technology we have to really deliver some efficiencies for government," he said. Logica provides consulting, outsourcing and information technology services to governments and companies in Europe. In the U.K., it has contracts with various government departments including the space agencies, the Ministry of Defense and the police. Some analysts have raised concerns that Logica could be hard hit as the U.K. government slashes costs in an effort to trim its ballooning budget deficit. Boundy declined to say how many U.K. government contracts it has, but said it had a broad spread across different departments that will continue to deliver cost and operational efficiency; for example the Police National Database, a GBP75 million contract to electronically access, search and share local intelligence on a national basis. The other 40% of Logica's U.K. revenue is generated from utility, energy and telecom companies, and Boundy hopes to maintain the balance despite the government cuts. Around 32% of Logica's total revenue comes from public sectors across Europe, and 20% of group revenue comes from the U.K. Approximately 13% of Logica's total revenue comes from the U.K. public sector. On Monday, the coalition government formed by the Conservative and Liberal Democrat parties outlined GBP6.25 billion in cuts, with more to come, saying it wanted to save GBP1.7 billion from stopping projects and renegotiating large government contracts with suppliers. Local government will be expected to find GBP1.17 billion in savings. Next month, the coalition government will unveil further cuts in an emergency budget, and later in the year it plans to announce the results of a spending review designed to work out how to assign longer-term spending cuts.
05-05-10	05.05.10 :-3.1, (134.3) Logica's 1Q revenues "show a promising improvement but the worries over UK public sector exposure may reignite" following the disappointing UK business-to-business performance, Evolution Securities analyst Roger Phillips says. "Shares have run ahead (around) 18% since results and we would look for an opportunity to buy on weakness if UK worries become overblown," he says. Phillips has a buy rating on Logica and 150p target price.
05-05-10	05.05.10 :-3.1, (134.3) Logica's 1Q trading update is in line with expectations, with revenues down 2% year-on-year, Numis analyst Will Wallis says. FY guidance remains unchanged (flat revenues and margins, no profit and loss exceptionals), and Wallis expects "no material changes to consensus forecasts today". Adds: "Although this report shows continued evidence of turnaround, in line with expected timing, we continue to have longer-term concerns about the competitive threats facing Logica, and also about the 'exceptional' costs that are likely as a result," he adds. Wallis has a reduce rating on Logica and 115p target price.
23-04-10	23.04.10 :+0.7, (147.4) UBS downgrades Logica to neutral from buy following the stock's strong outperformance year to date. Notes Logica has outperformed Capgemini (CAP.FR) and Atos Origin (ATO.FR). Also notes near-term newsflow is likely to remain challenging. With sales expected to be still in decline and a looming UK election, thinks there will be headwinds to a continued re-rating. Says: "13% of group sales come from the UK public sector...and we see post-election cost-cutting actions as a real risk to investor sentiment." Has 155p price target on the stock.
21-04-10	21.04.10 :+0.6, (145.4) Morgan Stanley raises Capgemini (CAP.FR) target price to EUR46 from EUR40 after raising '11 EPS estimate following signs that expectations for late cyclicals such as Capgemini and Logica (LOG.LN) are too conservative on revenue and margin. Also raises Atos Origin (ATO.FR) target price to EUR38 from EUR35, integrating a lower tax rate. Yet thinks Atos is less geared to the recovery than peers. Keeps overweight rating on Capgemini and equalweight rating on Atos.
15-04-10	15.04.10 :+1.6, (145.5) Numis Securities increases its Logica target to 115p from 105p "to reflect the overall market rise," says Numis. "The stock already trades on 12x peak earnings based on last-cycle margins - for a business that grew just 2% compound over the last cycle," the brokerage adds. "Management has not done badly recently, but we think the market is over-extrapolating from this. We see many lower-risk ways of playing a cyclical upswing in the software/services sector." Neutral rating.
14-04-10	14.04.10 :+4.5, (143.6) Logica +4.1% at 144p on signs of an improving trading environment following Atos Origin's 1Q results and outlook comments. "Reading across from Atos Q1 results this morning we see a generally improving environment [growth in the book to bill] but still a difficult market in Benelux and in Systems integration," Panmure Gordon analyst George O'Connor says. As to the Logica investment case, the valuation is cheap, P/E 10.28x, but in O'Connor's view "the UK election stands in the way of the inevitable re-rating - it should do well as the UK Public sector looks to outsourcing to reduce cost and 'do more for less.'" Buy rating, 162p target.
13-04-10	13.04.10 :-0.3, (137.8) Credit Suisse upgrades Logica to neutral from underperform, after previewing the 1Q for software and IT services. Overall, expects to see a return to IT spending growth aiding software performance, beginning in 1Q. Also thinks M&A continues to be an important theme in the sector. Expects consolidation to accelerate in '10 and says this looks to be the case already in 1Q. Expects more comments from companies on earnings regarding the M&A environment and specific M&A strategies. Adds that the stronger dollar should help those reporting in sterling and euro. Has 140p Logica price target.
09-04-10	09.04.10 :-0.3, (136.6) European stocks are still on track for a sustained, if uneven, recovery says Citigroup. It says economic recovery and operational leverage will drive a robust rebound in profits. It notes that despite the re-rating over the past year, European equities are still as cheap, or cheaper, than March '03 on various metrics. The brokerage looks for international exposure, earnings momentum and strong balance sheets. It favors Akzo Nobel (AKZA.AE), Autonomy (AU.LN), BBVA (BBVA.MC), BHP Billiton (BLT.LN), BNP Paribas (BNP.FR), Credit Suisse (CSGN.VX), Eurasian Natural Resources (ENRC.LN), Givaudaan (GIVN.VX), Imperial Tobacco (IMT.LN), Logica (LOG.LN), Nokia (NOK1V.HE), Novartis (NOVN.VX) and Richemont (CFR.VX).
09-03-10	09.03.10 :+3, (124.3) Evolution Securities raises Logica to buy from neutral, and lifts target price to 150p from 100p. Says the company has a circa 8% 2010 free-cash-flow yield and cyclical lead indicators started to turn positive in 4Q09. Adds that the new target price of 150p represents 23% upside from current levels. "We see Logica as a strong late-cycle play that is defensive on valuation, cash generation and forecast grounds," adds Evolution.
05-03-10	05.03.10: +2.5, (122) IC says Sell (120p): BEAR POINTS Dull outlook for 2010 - Profit margins under pressure - Consulting revenues on downward trend - Tough end markets BULL POINTS Cost savings coming through - Resilient UK business.
25-02-10	25.02.10 :-0.7, (118.2) UBS upgrades Logica to buy from neutral and lifts its target price to 140p from 130p. UBS says a decent outsourcing backlog at the start of the year means Logica can guide toward flat sales for the year, "but otherwise its expectations triangulate nicely with the peer group and point to a return to cyclical sales growth in 2H." UBS says while double-dip macro risk remains and public sector sales visibility is low, "comments from Logica and its peers strongly suggest the stabilization process is starting."
25-02-10	25.02.10 :-0.7, (118.2) PiperJaffray increases its target price on Logica to 141p from 136p. Analysts are surprised by the market's negative reaction to the group's earnings and outlook Wednesday. Says the group's guidance for 2010--pointing to flat revenue and margin--is strong compared to peers. Keeps overweight rating.
24-02-10	24.02.10 :-7.5, (116.9) Numis upgrades Logica to reduce from sell and ups its target price to 105p from 95p. Notes a solid statement, but guidance for 2010 revenues and margins to be flat is likely to lead to around 3% downgrades to consensus operating profit forecasts. Remains sceptical about Logica's ability to hit its target towards double-digit margin long-term, particularly without taking cash exceptional charges.
24-02-10	24.02.10 :-7.5, (116.9) Logica's 2009 results are positive but the outlook statement is "not specific" on targets, Evolution Securities analyst Roger Phillips says. Phillips notes fundamental questions exist on the extent of the strategic turnaround, but for now, the focus will shift to 2011 scenario-setting looking for improved revenue growth and margin increases. Phillips has a neutral rating and his 123p target price is under review.
24-02-10	24.02.10 :-7.5, (116.9) Logica's 2009 results are in-line-to-slightly-ahead of forecasts and the tone of the accompanying statement is solid, says Numis analyst Will Wallis. However, Wallis also notes guidance for 2010 revenues and margins to be flat is likely to lead to around 3% downgrades to consensus operating profit forecasts. "We continue to believe that the mid-tier European IT services companies such as Logica are highly structurally challenged," Wallis says. Sell rating and 95p target.
24-02-10	24.02.10 :-7.5, (116.9) Logica's FY results are solid and in line with company guidance says Singer. Notes Logica has seen some stabilization in the volume of opportunities and pricing levels in consulting and professional services in 2H '09, which is an encouraging lead indicator, says Singer. In outsourcing, says the company continues to see an increase in opportunities in the commercial sector and a good pipeline across Europe for the public sector. Thinks the company guidance will be seen as realistic, with possible upside if leading indicators continue to improve. Keeps at fair value with 120p price target.
24-02-10	24.02.10 :-7.5, (116.9) Logica's FY09 earnings and outlook statement are in line with consensus, says Execution Noble. Execution says the UK which accounts for 20% of revenues was the strongest market with 6% year-on-year growth. The brokerage adds UK pipeline at the beginning of 2010 is up 20% versus the beginning of 2009. However, Benelux [16% of revenues] was the weakest market, -18% year-on-year. "Benelux is heavily weighted towards short-term consulting and professional services assignments which were affected by the economic downturn," says Execution.
24-02-10	24.02.10 :-7.5, (116.9) Logica's 2009 results are positively received, Panmure analyst George O'Connor says. O'Connor notes a good top-line figure and profitability is better than expected, with solid operations in the Nordics and France. Good cash position and order book are also noted. Panmure has a buy rating and 151p target.
08-01-10	08.01.10 :+0.15, (123.35) Seymour Pierce ups Logica to buy from outperform and target to 140p from 118p. Says although UK public sector IT spending is likely to take a pause during this election year, the impact is likely to be limited. Adds that Logica continues to trade at a material discount to the average for the IT services and consulting peer group. Thinks the market has yet to factor in a recovery multiple for Logica, which suggests there is the potential for a rerating in due course. Says the final results in February may be a catalyst.
05-11-09	05.11.09 :+1.5, (123.5) UBS upgrades Logica to neutral from sell and raises target price to 130p from 120p, as "visibility over the year-end is solid at this stage of the year, so risks to a targeted flat margin are consequently modest." However, notes outsourcing continues to carry the business and cautions the UK business (50% outsourcing) could see challenges next year as the public sector growth engine is impacted by the general election and fiscal retrenchments.
05-11-09	05.11.09 :+1.5, (123.5) Capgemini cutting its full-year and 2H revenue guidance represents a "significant miss," says WestLB analyst Jonathan Crozier. Says 3Q revenue is below expectations and the new revenue outlook is worse than the one for competitor Logica (LOG.LN). Keeps a neutral rating. No target price.
05-11-09	05.11.09 :+1.5, (123.5) Goldman Sachs raises Logica target price to 135p from 130p after the company's 3Q update confirms a stable outlook. "Outlook commentary pointed to sequential stabilization across the project business and anecdotal improvements in business and pipeline activity." However, the brokerage notes 3Q'09 revenues are somewhat weaker than expected and continues to expect only limited improvement in operating margins. Keeps at neutral.
04-11-09	04.11.09 :+4.7, (121.7) Logica's 3Q update is broadly neutral, says Numis Securities. Notes both minor positives and negatives. Says on the positive side, maintained margin guidance and currency movements could lead to a modest drift upwards in "adjusted" earnings forecasts. On the downside, Logica has taken an additional GBP20M restructuring charge, and book-to-bill in the period was a little weak. Continues to believe the group's structural challenges make it an unattractive investment. Has sell rating, and 90p target price.
04-11-09	04.11.09 :+4.7, (121.7) Logica's 3Q revenue is ahead of expectations, says an analyst. Notes revenue of GBP862M, compared with the brokerage's forecast of GBP857M. The analyst says the UK sales performance is the best by region, with revenue of GBP198M, while Benelux is the weakest. The analyst notes additional cost reduction should give savings of GBP15M from '10 at a one-off cost of around GBP20M in '09, which prompts an increase in its net debt estimate to GBP371M.
04-11-09	04.11.09 :+4.7, (121.7) Logica's "outsourcing strength has been offset by consulting weakness" in the 3Q ended Sept. 30, KBC Peel Hunt analyst Simon Strong says. While more cost is coming out of the business, Strong foresees "increasing risk servicing the government sector." He retains a hold rating on the stock and a 95 pence target price.
04-11-09	04.11.09 :+4.7, (121.7) Logica downgrades FY revenue guidance but it's "not a disaster," Evolution's Roger Phillips says. "Not a disaster but official revenue guidance downgraded and additional exceptional cost imply the outlook for FY10 estimate is getting weaker. After the 3Q run we expect the shares to drift back to our target price," Phillips says. He has a neutral rating on Logica and 100p target price.
22-09-09	22.09.09 :+1.6, (135.1) Bank of America Merrill Lynch raises Logica price target to 157p from 147p. Says the rise is driven by the increase in the brokerage's mid-cycle margin assumption to 8% from 7%. Says the company, under the new management, is exhibiting better cost control than previously anticipated. Adds that Monday's proposed acquisition of US IT services vendor Perot Systems (PER) by Dell (DELL) highlights that current valuations in the sector are still attractive. Sees M&A as a theme in the sector for the next 12 months. Keeps Logica at buy.
25-08-09	25.08.09 :+1.5, (115) Royal Bank of Scotland cuts Logica to hold from buy as the "peer group valuation looks fair." Says the company's 1H earnings were broadly in line with expectations and shows the company is controlling costs in a difficult market. RBS raises target price to 121p from 80p but says that management has acknowledged that the level of visibility for 4Q is less than at this point in 2008.
17-08-09	17.08.09 :-2.6, (111.9) Exane BNP Paribas raises Logica target price to 100p from 59p. Says 1H09 results are strong and less impacted by the economic crisis than expected. Still, "we were concerned about debt refinancing in 2010." Nevertheless adds that solid performance on net debt in 1H09 and two new financing facilities have allayed these concerns and this was clearly positive for the shares. Brokerage keeps underperform rating due to the risks it sees on lower pricing on fixed-price contracts over the next 12 months.
10-08-09	10.08.09 :+1, (113) Citigroup upgrades Logica to hold from sell, and lifts its target price to 120p from 60p. "We over-estimated the cyclicality on the profitability and as cost control is coming through Logica managed to completely offset the cyclical margin pressure, delivering flat 1H margins," says Citi. Says risks remain, but the market is increasingly looking through the cycle and is buying cheap late-cyclicals, such as IT services.
07-08-09	07.08.09 :+3.1, (111.6) Logica's 1H operating profit is ahead of consensus and the revenue guidance hasn't changed, but there has been a slight softening on margin guidance, Evolution analyst Roger Phillips says. Adds they originally said margins would be at least flat, but are now saying only flat on last year, so the potential for improvement is gone. Still, consensus is quite a bit lower than management guidance, so there could be upward pressure on full year consensus as a result of these numbers. Has its add rating under review.
07-08-09	07.08.09 :+3.1, (111.6) Logica delivers a reasonable set of 1H results given the current market, says Investec. Adds crucially, the cost base is being well controlled with no indications the cost take out plan will have to step up materially. Sees guidance as overly positive considering the difficult trading backdrop, but believe this is reflected in consensus. Has a hold rating, and 107p target price.
03-08-09	03.08.09 :-1, (103) Deutsche Bank lifts Logica price target to 135p from 100p, and reiterates its buy rating. Notes the company is due to release 1H results Friday, and "we feel our forecasts are extremely underpinned and carry upside potential coupled with the view that the stock can move to a mid-cycle valuation."
31-07-09	31.07.09 :+4.25, (101.25) Morgan Stanley upgrades Logica to overweight from underweight, lifts its target price substantially to 130p, from 70p. Thinks the discount on gearing concerns is no longer warranted and sees the cycle troughing. Thinks the shares could realistically double from current levels if the company delivers 8% margin in '10. Sees limited negative surprises in 1H '09 results on Aug. 7.
31-07-09	31.07.09 :+4.25, (101.25) Bank of America Merrill Lynch upgrades Logica to buy from underperform and increases the target price to 118.2p from 73p. Says the main driver is a move to mid-cycle valuation scenarios from at trough valuation for the last 12 months. Expects a modest improvement in revenue in '10 and for margins to be slightly up compared to '09. Thinks the shares have good upside potential in a recovery as EPS numbers move significantly with IT spending improvements, especially given Logica's financial gearing.
31-07-09	31.07.09 :+4.25, (101.25) Morgan Stanley upgrades Capgemini to overweight from equalweight, and raises its target price to EUR37 from EUR31. Says with European business confidence indicators improving now for four consecutive months, it's now time to look at recovery metrics for the most cyclical services plays: Capgemini and Logica (LOG.LN). Says demand remains tough but Capgemini has negotiated it well, with margins holding up and costs being cut to protect profits. Adds, if conditions are troughing, earnings could start rising again in '10, and the stock should do well.
30-07-09	30.07.09 :+3.75, (93.5) Panmure Gordon raises Logica to buy from hold and lifts target price to 100p from 85p. Says the company benefits from another readacross Thursday with interim results from Capgemini (CAP.FR), following on from Atos Origin's(ATO.FR) interims Wednesday. "The brace of results gives Logica, in our view, licence to be more upbeat at its forthcoming interims (due August 7)," it says. Adds that Logica shares the same strong outsourcing offer as its two peers. "Investors sensing a more positive outlook are likely to be put more credibility in Logica's undemanding valuation on a current year P/E of 8.1x," adds Panmure.
17-06-09	17.06.09 :+1.63, (75.63) Deutsche Bank upgrades Logica to buy from hold, and lifts its target price to 100p from 77p. Says the stock is sitting close to trough valuation on realistic forecasts. "The consensual view is that IT services is a late-cycle sector that will see further demand cut-backs. While partly true we feel this is now discounted in forecasts and valuation. We are also less concerned about the balance sheet and feel the group has headroom to steer through the down-cycle."
09-06-09	09.06.09 :+1.25, (71.75) Seymour Pierce raises Logica to outperform from sell. Says the company's shares have underperformed the market by 22% over the past 12 months as investors attached a high degree of risk to the turnaround story in the face of progressively worsening end market conditions. "However, that trend appears to have modified. For example, the recent news flow from Financial Services (circa 17% of Logica's sales) appears to indicate that the market is at least steadying, if not improving, for the first time in many months," it adds.
15-05-09	15.05.09: +0.5, (74.75) IC says Sell (79p): BEAR POINTS Two-thirds of business under pressure - Troubled end markets - Underperformance in Netherlands operation - Premium rating compared with peers BULL POINTS Growing outsourcing business - Restructuring plan on track.
30-04-09	30.04.09 :-1, (77) Logica's trading update is reasonably positive and there are no fresh concerns in the statement, Panmure Gordon analyst George O'Connor says. Adds that stable revenue in the first quarter was better-than-expected. Says there are difficulties in consulting and professional services and there is an underlying lack of commentary on profitability. Hold recommendation.
20-04-09	20.04.09 :-4.75, (72.75) Numis Securities cuts Logica (LOG.LN) to sell from hold. Says the stock is up by 21% in the last six trading days, as cyclicals have rallied. "With cyclicals performing strongly, we can see why investors might want to stay on board, although we would recommend the emergency exit seats," it adds. Adds that recent sector news flow shows deterioration in 1Q09, and expectations of further worsening in 2Q09. "We still expect 2009 and quite probably 2010 to be very difficult, and we continue to believe that Logica is strategically challenged, so we move to a sell on a one-year perspective," it adds. Has 60p target price.
19-03-09	19.03.09 :+1.63, (68.88) the company says the current quarter was looking "great" and the company had a chance to improve profitability this year. Chief Executive Andy Green, who said last month he was confident of outperforming a modest decline in the IT services market this year thanks to sound outsourcing demand, said there were plenty of opportunities to win contracts. "Q1 looks like being great," Green told journalists at a meeting in London. "Looking forward into 2009, there's no shortage of opportunities to get out and put bid teams on the ground," he added. Demand for large outsourcing projects is expected to increase as companies look for new ways to squeeze costs. Green, who was previously head of BT's corporate IT services department, Global Services, reiterated that Logica should outperform the market this year, after a first half in which sales would be broadly flat. "Logica is likely to do better than the market," he said. Green added that Logica might even raise profitability this year. "There's a fighting chance to improve margins by half a percentage point this year," he said.
25-02-09	25.02.09 :+1.38, (65.88) the Anglo-Dutch computer services group's 2008 results beat expectations and it says it is confident of outperforming a declining IT market in 2009. Analysts are optimistic about the increased number of large outsourcing opportunities in the pipeline and say the company's closing net debt position of 438 million pounds is better than expected. "First half (2009) margins are expected to be maintained, with the goal of a 500 basis point improvement for the year reliant on the second half when the effects of recent cost cutting will become apparent," says Seymour Pierce analyst Derek Brown. "This is tempered with additional caution on the market outlook."
11-02-09	11.02.09 :+1, (71) Goldman Sachs raises Logica Plc to buy from neutral and raises its price target to 85p from 81p. It also raises Dimension Data price target to 48p from 40p.
15-12-08	15.12.08 :-4.5, (59) Panmure cuts its targets for the company following the departure of Dutch CEO Paul Schuyt, announced Friday. "The Netherlands accounts for 19 percent of group EBITA. As a result of the news, we have reduced our 2008 estimated Netherlands margin from 8 percent to 7 percent. This lowers our 2008 estimated EPS from 10.8 pence to 10.5 pence," says analyst George O'Connor.
27-11-08	27.11.08 :-4.5, (66.5) announces new long-term banking facilities of 500 million euros ($646 million) and a reiteration of targets. "In a week when IT service company Ordina issued a profit warning, it is pleasing to see that Logica was able to secure new debt facilities -- increasing the size, lengthening the term with no increase on effective interest rate or covenants," said Panmure analysts in a note. "A lack of resources has hampered Logica restructuring -- hopefully now it can redouble its efforts. Logica benefits from currency translation and using fewer subcontractors eases margin pressure as we come to the end of the year. We retain our 'Hold' recommenation for now."
17-11-08	15.11.08: an article in the Independent reports: LogicaCMG fell 8p to 67.25p after rumours about a possible liquidity problem overshadowed a well-received interim management statement.
14-11-08	14.11.08 :-13.62, (67.38) the Anglo-Dutch IT services firm posts better-than-expected third quarter sales and raises its full-year revenue growth target. Panmure Gordon analyst George O'Connor says the statement is "fairly positive-ish", and pleasingly the order book is 13 percent up on Q3. "Despite seeing a downturn in 2009, Logica still expects growth and margin improvement of 0.5 percent," he says. "We reserve judgement on this one," he adds, and retains his "hold" recommendation.
22-10-08	22.10.08 :-5, (73) shares down after recent trading statements from India-based rivals such as Wipro, Infosys and Satyam disappoint the market. "Indian outsourcing companies have high exposure to the US market but as many of the customers they service are global we expect similar trends to emerge as the European outsourcing and consulting companies report results. We see Logica as particularly vulnerable in this deteriorating environment," says Seymour Pierce analyst Derek Brown, who reiterates his "Sell" rating.
21-10-08	21.10.08 :-1, (78.5) Goldman Sachs raises its rating to neutral from sell; Removes from pan-Europe sell list.
14-10-08	14.10.08 :-1.5, (87.75) Deutsche Bank cuts price target to 102p from 145p; rating hold.
03-09-08	03.09.08 :-4, (139.25) Landsbanki UK cuts its rating to "hold" from "buy" on the European IT and business services company, citing valuation grounds, whilst repeating its 150 pence target price. Landsbanki UK says in a note Logica's shares have seen a strong run this year, climbing from 99 pence in January this year, but it now sees greater value and less risk elsewhere in the sector, highlighting Serco as a better outsourcing near term play.
15-08-08	15.08.08 :+8.25, (132.25) lower early morning after Numis downgraded to 'sell' from 'reduce' with a raised price target to 100 pence from 95 pence and Evolution Securities cutting to 'add' from 'buy', market sources said. In a note published this morning, Numis said that it remains concerned about the medium term cyclical and structural challenges and it is downgrading Logica. Numis said that in line with guidance it expects revenue growth to slow in the second half of 2008 for the group, and in particular it continues to see significant cyclical risks in full-year 2009. However, reflecting first-half results and current momentum, it is upgrading Logica's full-year 2008 forecasts with earning per share rising by 3 to 4 percent. The broker added that it believes Logica is poorly positioned and it thinks that the offshoring trend is a major threat to the group. Elsewhere, Evolution Securities said that strong results at the headline level reflect a UK turnaround. However, Evolution Securities said that Logica's valuation is starting to be up with events again. The broker added that as Logica is so early in the turnaround process and the macro outlook is so uncertain it is downgrading the group.
15-08-08	15.08.08 :+8.25, (132.25) UBS has downgraded its rating on Logica Plc to 'sell' from 'neutral', according to dealers, pointing to stagnant margins in the first-half results on Thursday. UBS said Logica's UK recovery is worthy of mention, with the commercial segments rising 5 percent year-on-year in the first half of 2008 after declining 31 percent in 2007. However, it added that higher subcontracting levels and stagnant margins are not positive. UBS said that while restraint is probably sensible given the uncertainties over 09, margin progress will be hard if the group continues to rely on subcontractors to meet incremental demand. The broker upped the target price on Logica to 105 pence, from 97 pence. Meantime, Investec has also cut its rating on Logica to 'sell', from 'hold'. Investec said that with the stock having now run up in excess of 25 percent, the broker believes that it is starting to price in the start of a turnaround. Investec has upped its price target to 106 pence, from 101.
14-08-08	14.08.08 :+8.75, (127.75) higher early morning after the group's first-half results beat consensus with Deutsche Bank reiterating its 'buy' stance and price target of 145 pence, market sources said. In a results statement, British IT group Logica said first-half revenue rose 6 percent to 1.77 billion pounds ($3.37 billion), after a good performance in all markets and it upped its full-year revenue growth forecast to 4 percent from 3 percent. The company, which announced a $219 million restructuring plan in April, said adjusted operating profit was up 16 percent at 118 million pounds, beating a company-supplied consensus of 115 million pounds. In reaction, Deutsche Bank said that Logica first-half results beat consensus and topline guidance has been raised closer to 4 percent year on year from 3 percent. The broker added that the recent performance from the group as well as new orders has given them confidence to raise its outlook. Elsewhere, Landsbanki retained its 'buy' stance and 150 pence price target. Landsbanki said that Logica had a positive set of interim results and thinks these encouraging results will help Logica outperform from here.
30-07-08	30.07.08 :+2, (107) Logica Plc. has been downgraded to 'underweight' from 'neutral' and its price target cut to 100 pence from 135 at JP Morgan, which says an in-line set of first-half results would be an opportunity to sell, according to traders. In a note to clients on Wednesday morning, JP Morgan said that it believes Logica will continue to see pressures on its top line exacerbated by its long restructuring process, limited offshore presence and already weak UK business, consistent with its view of a weakening technology spending environment. As such, the broker said it has cut its 2008 and 2009 EPS estimates by 3 percent and 9 percent respectively and is now below consensus by 3 percent and 6 percent. Forecasting 2008 and 2009 EPS growth of just 9 percent and 4 percent, the broker said it expects the stock to trade at its trough valuation -- P/E of 9 times 2009 estimates. JP Morgan concluded it expects Logica to report an in-line set of results for the first half of 2008 and to reiterate 2008 guidance on Aug. 14, largely due to currency tailwinds. It added it would be sellers on any near-term bounce on these results.
22-07-08	22.07.08 :-0.75, (112.25) Credit Suisse has downgraded its recommendation on Logica Plc. to 'underperform' from 'neutral' and cut its target price to 90 pence from 100 pence. The broker also reduced its rating on Tietoenator Oyj. to 'neutral' from 'outperform', whilst cutting its target price to 16 euros from 21 euros, traders said. In a note to clients, Credit Suisse said IT spending growth is likely to be modest in 2009, and it believes market expectations of growth and margin expansion are too high. The broker highlighted concerns regarding a drop in public sector IT spending in Europe, an increased propensity to offshore from key geographies such as Scandinavia, Benelux & Germany and higher competition from offshore vendors in context of a slowdown in US & strengthening of the euro. As a result, the broker has lowered its IT Services 2009 revenue estimates by 2.1 percent in IT coverage universe to reflect the worsening demand environment. In the same note, Credit Suisse also cut its target prices for Capgemini to 49 euros from 59 euros, and for Indra Sistemas to 19 euros from 22 euros.
18-07-08	18.07.08 :+5.25, (114.75) Investec Securities has upgraded Logica Plc. to 'hold' from 'sell' with a price target cut to 101 pence from 102 pence, while making forecast downgrades across the sector, as part of a technology review. In a note on Friday, Investec Securities said that it is upgrading Logica as the stock is near its target price. However, the broker said it is still reducing EBITA forecasts for the group by 2 percent for 2008 and 5 percent for 2009. Investec said that it expects trading will become more difficult for the group in the second half of 2008 and full-year 2009, however it believes that an element of this has already been priced in. Elsewhere, Investec has retained its 'hold' stance on Computacenter Plc. and cut its price target to 147 pence from 155 pence. Investec said that it is making a further 8 percent and 16 percent cuts to EBITA for 2008 and 2009. The broker said that until there is greater clarity on fourth-quarter 2008 and full-year 2009 forecasts, in this current environment it believes the stock will struggle to trade near or breach this level due to perceived forecast risk. Investec reiterated its 'buy' stance on Dimension Data Plc. and cut its price target to 56 pence from 59 pence. The broker said that despite management's best efforts, revenue will undoubtedly come under strain in the coming 12 to 18 months and adjust its forecasts accordingly. Investec said that Misys Plc. has been kept as 'hold' and price target cut to 159 pence from 167 pence. The broker said that Asian exposure has cushioned slower US and Western European demand for Misys, however, a continued slowdown would impact the business and this drives a 6 percent 2009 profit downgrade. And, Investec has kept Sage Group Plc. as a 'hold' with a price target cut to 218 pence from 233 pence. The broker said that Sage significantly grew support sales in the last downturn, albeit mainly driven by price increases and upgrades, neither of which may be easy to achieve this time around. Investec said that it is downgrading profit forecasts by 2 percent for full-year 2008 and 6 percent for full-year 2009.
09-07-08	09.07.08 :+1.25, (102.5) gained in late morning trade, as Evolution Securities upgraded its recommendation to 'buy' from 'add' on valuation grounds ahead of the software group's interim results. In a note sent to investors this morning, Evolution said that following around a 25 percent fall in Logica's share price in less than two months, it has moved its recommendation back to 'buy' with an unchanged price target of 125 pence. The broker said this is ahead of interim results due August 14, which it thinks will likely prompt upgrades to full-year 2008 forecasts. It added that with limited UK financial services exposure and high Nordics concentration, Evolution thinks trading outperformance will have continued through the second quarter. It said longer-term macro conditions are uncertain, but Logica is relatively defensive compared to wider UK tech stocks.
30-05-08	30.05.08 :-0.5, (121.5) Lehman has downgraded its rating for Logica Plc to 'underweight' from 'overweight' mainly on valuation grounds, according to traders, with its target price left unchanged at 122 pence. In a note published Friday, Lehman said it was factoring in the execution risks from Logica's restructuring program, its limited margin upside and limited potential for a multiple re-rating of the stock.
29-05-08	29.05.08 :-2, (123.75) fell back in afternoon trade as Merrill Lynch added the Anglo-Dutch software group to its "least preferred" list and Investec Securities downgraded its recommendation to 'sell' from 'hold', citing headwinds. Merrill Lynch said it has added Logica to its least preferred list after recent gains, saying it thinks the stock may now fall back because of its exposure to cuts in discretionary enterprise spending. Investec agreed the positive newsflow surrounding the stock is now likely to wane. The broker added that favourable sentiment from the review has been priced in, with delivery still to come, while it also sees the market backdrop softening in the second half of 2008 and during 2009. Combined with playing catch-up on offshore, euro benefits now likely to have topped out and the potential for excess staff by mid-2009, this creates forecast risk, Investec said, hence its downgrade. The broker said it has upgraded its 2008 pretax profit and EPS forecasts by around 3 percent due to currency movements, but for 2009, has cut estimates by 4 percent. Its price target was maintained at 102 pence per share.
16-05-08	16.05.08 :+0, (125.5) Goldman Sachs has downgraded its stance on Logica Plc. to 'sell' from 'neutral' while reiterating its 120 pence target price, following its recent share price rally. In a note to clients published this morning, Goldman Sachs said following the share price spike the stock now looks expensive, and while a strong first-quarter leads it to raise expectations for 2008, it does little to alleviate concerns for 2009. The broker believes that any short-term gains are already priced in and fears the lengthy restructuring process ahead runs the risk of falling short of its target against the backdrop of slowing demand, especially in its core U.K. market.
14-05-08	14.05.08 :+0.5, (130.5) higher in early trade after the IT services company said its first-quarter revenue stood at 856 million pounds, up from pro forma revenue of 826 million pounds a year ago, and reaffirmed its 2008 guidance. The news prompted Numis Securities to downgrade its recommendation to 'sell' from 'reduce' while reiterating its 95 pence target price, after considering the long-term risks the company faces. Chief executive Andy Green said the first-quarter numbers represent a sound start to the year, with good growth across Europe. In reaction, Numis believes Logica continues to face significant structural and cyclical risks and will fail to acheive management's aspirations, but it does not expect a downturn to have much of an impact until 2009. Commenting on the results, the broker said they were ahead of its forecasts, while not high in absolute terms, and support management guidance for 2008. In the short term, the first-quarter figures should be modestly positive for the shares, it added. Earlier, Landsbanki said it remains a buyer at this level and the shares will receive a short-term benefit from the Hewlett Packard Co./EDS deal.
25-04-08	25.04.08 :+2, (117.75) Merrill Lynch has downgraded its recommendation on LogicaCMG Plc. to 'neutral' from 'buy' following mixed signals received at the company's analyst day and the risk of a more pronounced economic slowdown in Europe, traders said. In a note to clients published this morning, Merrill Lynch said Logica's restructuring plans, which is expected to take a few quarters, raised several questions, especially regarding its move into consultancy at this point of the cycle. The broker said it was cutting its earnings estimates for 2008 by 1.5 percent, but reported earnings take a bigger hit, down 77 percent, due to the 70 million pound additional restructuring charge. The broker concluded, at a price earnings of 10 times on its 2008 earning estimates, valuation does not look demanding, but with no near-term catalyst and the prospect of tougher times ahead, it sees little upside in the coming months.
23-04-08	23.04.08 :+3, (116) higher early on, with Arbuthnot Securities upgrading its recommendation to 'buy' from 'neutral', according to market sources, following Tuesday's announcement by new CEO Andy Green of plans to revitalise the company. In a note to clients, Arbuthnot said that some very precise guidance, combined with the strengthening euro, has led it to upgrade its top of the range numbers by around 3 percent (suggesting to it that consensus is about 5 percent too low). The broker said its recommendation upgrade reflects its new forecasts, and the prospects for 15 percent to 20 percent earnings growth in each of the next three years. The broker has lifted its target price to 140 pence from 120.
22-04-08	22.04.08 :-2.75, (111) fell in early trade as plans to revitalise its ailing IT services business failed to go far enough with analysts concerned about cost and execution risks. New chief executive Andy Green this morning outlined plans to implement a 110 million pound restructuring programme designed to effect annual cost savings of 80 million pounds from 2010. Cost savings will come from 1,300 mostly back-office job losses across the group, 500 of which will be in the United Kingdom, as well as offshoring where the company expects to more than double the workforce at its onshore and nearshore centres to 8,000 by the end of next year. The company also reiterated Logica's full year 2008 revenue growth target of 3 percent and said it is looking to grow ahead of the market from 2009 as well as improving margins by 100 basis points by 2010. In response, Panmure Gordon said it doesn't think the plans are radical enough, commenting that "repairing the damage to UK moral and structurally doubling the headcount is still not enough to create a competitive business." The broker is concerned that implementing the turnaround plan will be hard and "more likely than not will be punctuated by bad news and further restructuring costs". Panmure retained its 'sell' rating and 94 pence target price. Investec is also concerned about the execution risk to Logica's turnaround plan, and its reliance on a relatively good market backdrop to achieve the targets which it believes are relatively undemanding. "We think the margin growth targets are quite low, considering the cost needed to achieve them," the broker added. KBC Peel Hunt echoed this sentiment, commenting that "Logica's undemanding targets beg the question of whether it is setting itself too low a hurdle rate for recovery." And Numis was equally downbeat, reiterating its Reduce recommendation and 100 pence target saying "we think the group's poor positioning, increasing competition and likely market tightening will make the strategic plan very hard to deliver."
21-04-08	21.04.08 :-1.75, (114.75) Dutch broker SNS Securities has cut its price target for LogicaCMG shares to 1.15 pence from 1.65 for valuation reasons, analysts said. SNS Securities said the share is trading at a premium compared to its peer group. The price-target cut comes ahead of a presentation Tuesday of the conclusion of its strategic review. Analysts said they expect the company to say it will focus on more offshoring, better selling and divesting non-core assets, although delivering on its turnaround plan will be the key challenge for the group. "It is clear that expectations are high, due to the tremendous track record of the new CEO in successfully building out the IT services business previously at BT," SNS Securities said. The broker believes potential upside of the new strategy to be limited by the fact that 75 of the group's operations - the Nordics, France, the public sector in the United Kingdom and the Netherlands - already are at a solid level of performance. SNS Securities said it considers the UK Commercial as the main "drag" on profits, "but measures have already been announced, and a recovery is already included in earnings projections."
11-04-08	11.04.08 :-3, (108) UBS has placed a short-term trading 'sell' on LogicaCMG Plc. due to the shares' outperformance in recent weeks, while retaining its 12-month rating as 'neutral' and a target price of 110 pence, traders said. In a note to clients published this morning, UBS said it is surprised Logica's shares have rallied 20 percent since March 7, as the company's strategy update, due out on April 22, is expected to be negative. The broker said the update will merely emphasise how long a turnaround is likely to take and just how far Logica is behind its peers. UBS also believes the company's annual general meeting statement on May 14, 2008, will show a continuing decline in the UK and deceleration of the business given more challenging comparatives.
10-04-08	10.04.08 :-2.75, (110) Numis Securities has downgraded LogicaCMG Plc. to 'reduce' from 'hold' and changed its forecasts for the group, as it predicted challenges facing the group's new CEO. In a note this morning, the broker said it thinks new CEO Andy Green has a good perspective on the significant challenges facing Logica, but that executing the plan to tackle these will be his biggest hurdle. Numis Securities noted structural challenges such as little competitive differentiation and said it thinks as part of Green's strategy, he will attempt to minimise upfront financial costs and show increased willingness to sell non-core units. It thinks actually delivering substantial change in a 40,000 person geographically and culturally diverse professional services business is the key challenge. For 2008, the broker raises its full-year EBITA forecast by 3 percent and its EPS forecasts by 2 percent. Its December 2008 net debt forecast rises to 530 million pounds from 503 million pounds.
03-04-08	03.04.08 :-1.75, (110) slipped a touch lower in morning trade, with Evolution Securities cutting its stance to 'add' from 'buy' as it believes the stock's valuation is in line, although it notes the group is building momentum. In a note published early Thursday, Evolution Securities said it thinks the shares' rebound from the over-reaction following Logica's 2007 results is now drawing to a close. The broker added that recent announcements are building a good feeling around the stock, but with a 26 percent bounce in a month and a sector rating, it thinks substantive detail on a turnaround is now required for the shares to make further progress.
25-03-08	25.03.08 :+6, (100.25) rose in morning trade after Evolution Securities initiated coverage on the software group with a 'buy' recommendation and 110 pence price target. In a research note this morning, Evolution told clients the company stands to benefit substantially from sterling weakness against the euro and krona, driving the broker's underlying full-year 2008 constant currency revenue growth forecast of 2% to 12% at current exchange rates. The broker added it sees potential for a recovery in sentiment surrounding the group, with a strategy review due in May. Pointing out Logica trades at a discount to the Euro IT services average, the broker also said bid speculation could be on the cards for Logica following the recent TietoEnator Oyj approach from the private equity sector. Evolution said the TietoEnator approach suggests a potential value for Logica of 125 pence per share.
25-03-08	25.03.08 :+6, (100.25) broker Petercam has downgraded LogicaCMG to 'sell' from 'hold' and reduced its target price to 100 pence from 146 pence on valuation grounds. The broker said it was cutting its earnings per share estimate and price target "mainly due to the weak margin outlook". "We see hardly any upside for Logica, while we expect 28% upside for our Benelux universe in the next 12 months. Within the IT sector we prefer Ordina and Unit 4 Agresso," Petercam said.
04-03-08	04.03.08 :-0.75, (89) Rabo Securities downgraded Logica CMG to 'hold' from 'buy' and cut its price target to 1.35 eur from 2.70 eur due to a weak earnings outlook. "The earnings outlook for the transitional year 2008 is not positive," Rabo said. "Negatives include 30m eur restructuring expenses, 5m for rebranding, higher interest charges, a higher tax rate, flat margins and lower market growth." The broker now expects the operating margin to be flat at 6.8% in 2008, down 140 basis points from its previous estimate of 8.2%. Rabo Securities also lowered its organic sales growth forecast for 2008 to 2.3% from 3.8% due to an expected growth slowdown for IT services markets. This is below Logica CMG's guidance of 3%.
27-02-08	27.02.08 :-4.25, (105.25) lower in opening deals, after its full-year results this morning showed operating profit below expectations. In reaction, WestLB reiterated its 'hold' recommendation, according to dealers. Earlier, the Anglo-Dutch computer services company, announced a review of its business as it reported a 3% rise in full-year pro forma revenue and said it expects a similar rate of growth in 2008 in an "uncertain market", while adjusted operating profit came in at 207.6m. In reaction to the results, WestLB said the revenue figure was higher than anticipated, but operating profit was 7.6% below expectations and the broker repeated its 'hold' recommendation. Elsewhere, Landsbanki said sales were 2% ahead of what it was looking for, but EBITA at 207.6m some 7% below their forecast, due mainly to the ongoing weak UK business. It added that a lack of guidance on 2008 today has led it to remain at the bottom of profit consensus in recent months for 2008, but it expects the consensus to fall around 5-10% on the back of these weak numbers. However, the broker sees significant upside potential being driven by a focus on off-shoring and global service delivery, but it remains aware of the risks in the near term but retains its 'buy' view longer term.
14-02-08	14.02.08 :-0.5, (102.25) Piper Jaffray has kept LogicaCMG on a 'buy' rating as it noted a positive read-across from CapGemini's full-year 2007 results and outlook. In a note this morning, the broker said CapGemini's strong 2007 numbers and strong 2008 guidance should help to return some confidence to the performance of the IT services business model through a market downturn, in its view. It said CapGemini's revenues rose to 8,703m eur from 7,700m eur for 2006. It noted that the company said it is not yet seeing any market slowdown, with bookings momentum sustained in the fourth quarter of 2007. Piper Jaffray thinks this, and the fact CapGemini has been able to issue such robust guidance, should be positive for its IT services peer LogicaCMG. It is keeping a 'buy' rating and its 128 pence price target on LogicaCMG ahead of its full-year 2007 results on Feb 27. The broker said risks include the group's integration of its WM-data unit and delivery of the expected cost savings related to the acquisition.
21-01-08	21.01.08 :-2.5, (96) Investec Securities has downgraded Aveva PLC, Datatec, Dimension Data PLC and LogicaCMG PLC to 'hold' from 'buy' in a software computer service sector review, market sources said. In a note published this morning, Investec Securities said that demand is slowing for technology given the macro-economic outlook. The broker added that although shipbuilding backlogs are at record highs, if orders start to be cancelled and new orders for 2012 onwards fall faster than anticipated, demand for Aveva's software could start to slow. Investec said that it was retaining Aveva's target price of 920 pence. Meanwhile, Investec has cut target prices on Datatec, Dimension Data and LogicaCMG to 230 pence from 300 pence, 55 pence from 65 pence and 113 pence from 178 pence, respectively. The broker added that it remains concerned for Datatec that, despite the company's positive stance, investors may be shocked by cautious commentaries from major US players in the coming weeks. Investec said that valuations for Dimension Data still far exceed the rest of the pack, rendering the group vulnerable to downside simply on sentiment. The broker said for LogicaCMG that it does not believe positive sentiment will return until it can get clarity on the demand outlook and comfort that new CEO Andy Green can restore company credibility. Elsewhere, Investec is downgrading NCC Group to 'sell' from 'hold' with a target price cut to 308 pence from 420 pence. The broker added that it is concerned on NCC Group's valuations, where growth in the core escrow business has been, for some time, a worry. Investec said that NCC Group's valuation materially exceeds the sector average. Finally, Investec has upgraded Sage Group to 'buy' from 'hold' with a target price of 255 pence. The broker added that Sage is, as in the last sector downturn in 2001-2002, a bastion of strength, delivery and reliability. Investec said that alongside modest geographic expansion, and "in-fill" acquisitions, this should provide the group with a stable and steadily growing revenue base.
11-01-08	11.01.08 :-0.5, (101.75) lower midmorning after Panmure Gordon downgraded its rating to 'hold' from 'buy' and cut the target price to 126 pence from 173.2. In a note this morning, Panmure said it was cutting its forecasts for LogicaCMG to reflect the increasingly difficult margin outlook. In addition, it said new chief executive Andy Green is likely to announce a restructuring in the March/April timeframe, creating further forecast uncertainty. LogicaCMG seems to be in a funk, said Panmure - too small to offer the economies of scale of a global Tier 1, while too large to offer the nimble economies of a smaller company. As the offshore brigade bids into LogicaCMG's accounts, any thoughts of margin expansion remain optimistic, said the broker. The difficulties in the UK are not across the board, nor are LogicaCMG's fortunes wholly dependent on the outturn in the UK, said Panmure. The broker said the company's European divisions are in quite good health, with operating results from the Nordics, the Netherlands, Germany and France all improving, but the broker has reined in its margin growth assumptions there. LogicaCMG suffers from having a differing vertical market profile for each country, said Panmure.
21-12-07	21.12.07 :+0.5, (112) Goldman Sachs has upgraded LogicacMG to 'neutral' from 'sell', according to dealers, on valuation grounds. In a note to clients this morning, Goldman pointed to the recent underperformance of its shares. Since Goldman added Logica to its 'Sell List' on Nov 6 2007, the shares have fallen 28.1 pct, compared with a 4% decline for the FTSE World Europe. Over the past 12 months, the shares are down 39.8 pct, versus a rise of 2.1% in the FTSE World Europe, it added. Goldman said its fundamental view on Logica remains unchanged but its underperformance has now brought its return potential in line with the broker's expectations for the overall peer group. Goldman's six-month multiples-based price target remains 157 pence, implying potential upside of 43%. A disappointing third quarter trading update has highlighted the continued issues in the firms UK business, said Goldman, which also remains concerned about longer-term operational upside.
05-12-07	05.12.07 :+6.5, (122) JP Morgan has added Andritz AG, LogicaCMG PLC and Premier Foods PLC to its top picks in a review of the small/mid-cap sector. In a note today, the broker -- reiterating 'underweight' on the sector overall -- started Andritz, LogicaCMG and Premier Foods as 'overweight' with price targets of 55 eur, 185 pence and 250 pence respectively. The broker said the sell-off in Pan-European Equities which has taken place since July has been particularly harsh on small/midcaps, ending their winning streak and delivering an average negative return of close to 13.2%. Consequently, valuations have been reined-in, said the broker, which lists its top picks, all with 'overweight ratings', as Aker Kvaerner and ERG in the oil sector, Allianz among insurers, Bank of Cyprus, Bank of Piraeus, Erste Bank, Garanti and Unicredit for banks, BMW and Fiat in autos and parts, Carphone Warehouse, CosmOTE, Telenet and United Internet in telecoms and Carrefour and William Morrison among food retailers. In aerospace and defence, EADS is its top pick, with E.ON and Veolia leading utilities, Givaudan heading food and cosmetics and Imperial Tobacco top pick in the tobacco sector. Nestle leads for food, TUI Travel heads hotels and leisure, Vedanta is the preferred choice among miners, while Vinci leads in building and construction. The broker said it views each stock as having high conviction "now" recommendations into 2008, with its sector long trades on an average forward price/earnings ratio for 2008 of 13.9x. JP Morgan added that the stocks have an average 2008 estimated earnings per share growth rate of 23.7 pct, with their price targets seeing average upside potential of 37.6 pct, it said.
07-11-07	07.11.07 :-5, (147.25) lower early morning after Goldman Sachs downgraded the group to 'sell' from 'neutral' with a cut in target price to 157 pence from 180 pence after its disappointing trading update Monday, market sources said. In a note published this morning, Goldman Sachs said that LogicaCMGs third quarter trading update disappointed on Monday, highlighting continued issues in the UK business and causing the company to reduce its full-year guidance. The broker added that it is downgrading the group as it believes uncertainty and the lack of near term catalysts until the arrival of a new CEO will give investors little motivation to buy back into the stock. Goldman Sachs said that it is also increasingly concerned about longer term operational upside for the group. The broker believes it will be difficult for the UK business to return to double digit margins as it passes the peak of the current cycle, and see margins in the remaining core geographies as already at or near peak levels.
05-11-07	05.11.07 :-4, (151.75) fell in morning trading as the Anglo-Dutch computer services company warned 2007 revenue growth will be lower than expected. In an interim management statement for the three months to September 30 Logica said it expects revenue growth of 3% for the full-year compared to previous guidance of growth in the lower range of 4-6%. "Strong comparatives in the final quarter of 2006 will result in lower fourth quarter growth rates, taking full-year revenue growth to around 3% at constant currency," the company said in a statement. Logica, which appointed a new chief executive last month, said it expects the European IT services market in 2008 to grow by around around 4-6 pct, broadly unchanged from this year. Panmure Gordon said Logica's performance was mixed. "In our view the market was expecting worse news and, while we are downgrading our sales and profit estimates, the news about operating margin of just under 9% should be read positively," the broker said in a note to clients, keeping its 'buy' recommendation on the company. Landsbanki's Michael Donnelly said he was slightly concerned at the Logica's minimal guidance for 2008 but said this might reflect uncertainty among companies about how much information to put in recently introduced interim management statements. Third quarter growth was driven by France, which grew pro-forma revenues grew by 17.1 pct, followed by the Netherlands (9.5 pct), and Nordic region (6.6 pct). UK revenues declined 7.5 pct, but Logica said its energy and utility businesses returned to growth in third quarter and there was strong growth in the public sector.
23-10-07	23.10.07 :-1.5, (156.5) Credit Suisse has downgraded LogicaCMG to 'neutral' from 'outperform', and cut its target price on the company to 180 pence from 195, following an IT services report, according to traders. In comment published today, Credit Suisse said recent contract pricing data in the UK suggests a sharp decline in pricing in the past two months and median prices now down 5% year-on-year. The broker said that although it remains constructive overall on the Software and IT services sector, it is incrementally negative on IT Services companies that lack a developed offshore capability and with exposure in the financial services vertical and UK private sector more generally. The broker added that it is reiterating its 'underperform' rating on Atos Origin, and remains positive on Capgemini on a fundamental and relative valuation basis.
09-10-07	09.10.07 :+15.5, (166.75) firmer this morning, following news it had appointed Andy Green, BT Group's head of strategy and operations, as its new chief executive, which was broadly welcomed by the investment community. In further reaction to the news this morning, Panmure Gordon said: "Andy Green has a wealth of transformational expertise - this is a key requirement for the job, which in our view is to create coherency across the acquired operating divisions." It said LogicaCMG has a major opportunity in introducing blended delivery solutions to clients in France and the Nordics. However, it believes that with its current limited resources, it is likely to be capacity constrained. Elsewhere, SNS Securities said it welcomes the announcement of the new CEO, adding that apart from fixing the issues in the UK commercial market, the key priorities for Logica are the integration of the acquired companies and an acceleration in organic growth. It said that in these areas Green has built a more than convincing track record at BT Global Services. Earlier, Landsbanki applauded the appointment because it was not internal, which it said had been a serious concern to investors until today, and also because LogicaCMG needs someone with successful outsourcing experience at the helm to unlock the hidden value in the shares.
06-09-07	06.09.07 :-2.5, (163) Theodoor Gilissen cut LogicaCMG to 'hold' from 'buy' with a price target raised to 2.65 eur price target from 2.60 eur because it estimates the recovery of the IT services company's UK operations has been priced into the share price. Aside from the UK side of things, the brokerage sees no other share price triggers on the horizon and therefore cut its recommendation.
30-08-07	30.08.07 :+3.5, (159.5) Rabo Securities has cut its price target on Anglo-Dutch computer services group LogicaCMG to 2.50 eur from 2.70, while maintaining its 'hold' rating. In a note to clients, the brokerage said: "The investment case remains unconvincing as LogicaCMGs blended delivery model does not reduce the number of subcontractors nor does it moderate wage inflation or accelerate top-line growth. Only the appointment of a credible CEO, or take-over speculation could spur the share price in our opinion".
29-08-07	29.08.07 :-2.75, (156) lower after a rise in half-year profits and progress in its search for a new chief executive failed to allay some investors' concerns. Earlier, the Anglo-Dutch computer services company reported a rise in pretax profit for the six months to June 30 to 29.2m, compared with a restated 26.8m a year earlier, on revenue up 36% to 1.52 bln stg, excluding the telecoms business and in line with the average analysts' forecast. Logica reiterated it expects European revenue growth of between 4-6% for 2007, at the lower end of the forecast range. The company said it was "making progress" in the search for a new chief executive, dashing analyst hopes that it would today announce a replacement for Martin Read, who announced his resignation in May, days after a profit warning. In reaction to today's statement, Citigroup said results were in line with its forecasts adding that the appointment of David Tyler as chairman was a positive development. Regarding the firm's margin guidance, it said this implies that the company is making good progress on its UK restructuring and the pre-announcement fears of a FY margin warning seem unjustified in its view. Citi said on the back of this result, it would expect a 2% consensus upgrade on EPS and it reiterates a 'buy' rating and 190 pence target. In other comment, UBS also reiterated its 'buy' rating and 180 pence target but thought investors will worry that French margins may remain under pressure, particularly given ex-Unilog CEO Didier Hermann's exit from the Board.
24-07-07	24.07.07 :-4, (156.5) lower this morning after executive director Didier Herrmann was asked to step down from the management board, but with both Merrill Lynch and Panmure Gordon retaining their 'buy' stance, market sources said. In a statement this morning, LogicaCMG said the board of management has asked Herrmann to step down from the board, and added that he will do so with immediate effect. Herrmann, who joined the LogicaCMG board following the acquisition of Unilog, was LogicaCMG executive vice president for France, Germany and Switzerland. In reaction, Merrill Lynch said this departure could suggest that there is a considerable amount of in-fighting going on at LogicaCMG to secure the CEO position. The broker added that it sees this as negative news for the group and it continues to favour an external candidate. Meanwhile, Panmure Gordon said that the news that Didier Herrmann is to leave the LogicCMG Board should be greeted positively and it suspects hints at further boardroom changes. The broker added that it had expected LogicaCMG share price to wobble following the news from TietoEnator news last week of rising staff costs in Scandinavia, but this latest news should encourage the share price to move upwards again. Panmure Gordon said that the valuation remains cheap and shares are trading on a 2007 price to earnings ratio of 14.9 times.

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