Citi has downgraded its short-term share price target for Wisetech, although it has maintained a “buy” rating for the ASX-listed global logistics software company. Wisetech shares experienced a sharp decline last Wednesday, plummeting approximately 12 per cent to $102, following an annual revenue report that fell short of analyst expectations. The company also provided underwhelming guidance for sales of its flagship Cargowise product.
Wisetech, a global developer of software solutions for the logistics industry, reported an annual revenue increase of 14 per cent, reaching $US778.7 million ($1.2 billion) for the full year ending on June 30. This figure was slightly below what analysts had predicted. The company also announced that its revenue is projected to increase by approximately 80 per cent next year, reaching $US1.4 billion, driven by its $US2.1 billion acquisition of US rival e2open.
Citi analyst Siraj Ahmed has reaffirmed his “buy” rating for Wisetech but has lowered the short-term share price target by 9 per cent to $121.35. This revised target suggests an underlying growth potential of over 22 per cent from the closing price of $99.04 on Tuesday.
According to Ahmed, the e2open acquisition brings increased execution risk, but it is expected to accelerate Cargowise’s growth by improving freight-forwarder solutions and facilitating expansion into the beneficial cargo-owner segment.
