Barclays upgrades Aveva after capital markets day

20th Sep 2018 08:03

(Sharecast News) - Barclays upgraded Aveva to 'overweight' from 'equalweight' on Thursday and lifted the price target to 3,150p from 2,800p following the company's capital markets day a day earlier.The bank said the CMD and outline of financial targets gave it a framework for the Aveva investment case to move forward.It argued that the fact Aveva was prepared to give medium-term ambitions for the first time shows the visibility the group now has over its strategy."Trading momentum remains solid, particularly in the heritage Aveva business, a 30% adjusted EBIT margin is an ambitious yet achievable target and, if the sales integration is truly successful, we see upside to the mid-single digit revenue guidance," it said.In addition, it said Aveva is serious about structurally improving the quality of the heritage Schneider assets - a transition to rental contracting and increased use of third-party systems integration.Barclays said the merger with Schneider Software provides the company with a compelling self-help opportunity to create revenue and cost synergies and expand its global presence."A prolonged period of end market weakness appears to have stabilised and we see potential for Aveva to return to double-digit earnings per share growth."At 1455 BST, the shares were up 5.6% to 3,000p.