Berenberg starts coverage of Accesso Technology at 'buy'

(Sharecast News) - Berenberg initiated coverage of Accesso Technology on Tuesday with a 'buy' rating and 775p price target. "We think that it is well positioned in a large, growing and fragmented market," the bank said.

"Significant operational leverage and a software as a service- (SaaS)-based business model provide scope for upside to accesso's current - relatively low - margin levels. Meanwhile, strong cash-flow generation and surplus cash should provide further upside potential."

It said the company, which provides virtual queuing and ticketing solutions for the global leisure industry, does have underlying exposure to cyclical elements of the leisure industry, which has weighed on its relative rating.

However, Berenberg believes that concerns about US consumer confidence are overdone, and that the market underappreciates Accesso's recent diversification and its long-term growth potential.

It said the recent share price performance has diverged from the underlying performance of the business and the stock now trades at a discount to peers and to its more recent historical average.

"We see this as an attractive entry point into a long-term growth story."