Aveva's 'buy' rating unchanged by Numis as CEO steps down

8th Jul 2016 09:58

(ShareCast News) - Aveva Group's shares jumped on Friday as Numis reiterated a 'buy' rating and target price of 1,910p.The information technology group said it could benefit from a potentially sizeable currency gain for the full year due to weakness of sterling since the EU referendum.The company added that trading had remained satisfactory in recent weeks. At the same time, Aveva announced the stepping down of chief executive Richard Longdon after three decades at the data and IT provider.Longdon will be replaced by chief financial officer James Kidd at the end of 2016. Kidd, who has been CFO since January 2011 and taking an increasing role in the commercial and operational development of the group in recent years, will be replaced in that role by Aveva's current head of finance, David Ward."In our view both James and David are very able individuals who will rise to the challenges of their new roles, and Richard's ongoing position with Aveva will ease the transition," according to Numis.Numis said its numbers suggest a 5% incremental benefit on a weaker pound for fiscal year 2017, but the broker will leave its forecasts unchanged for the time being."Our investment case remains that at some point the market backdrop will improve and Aveva will return to strong topline growth accompanied by significant margin expansion, and thus could deliver earnings 50% better than current levels (i.e. 90p + of earnings per share) which would put the shares on c.15x enterprise value: net operating profit after tax."Shares rose 5.63% to 1,800p at 1031 BST.