Deutsche Bank downgrades Softcat, upgrades Bytes Technology

(Sharecast News) - Deutsche Bank downgraded Softcat but upgraded Bytes Technology on Wednesday as it took a look at the UK software and IT services sector. DB noted that the sector has performed strongly in the last three months and is now slightly above where it was at the start of the year and around 42% above the low it hit in late March.

"Whilst a lot of this performance was accounted for by Computacenter, Softcat and Kainos which had upgrades, there has also been improved investor sentiment more recently, reflecting the swinging perception of the risk posed by AI on what are seen as traditional business models for Software and IT services," it said.

The bank cut Softcat to 'hold' from 'buy' but lifted the price target to 2,140p from 1,800p. It upgraded Bytes to 'buy' from 'hold' and increased the price target to 500p from 410p.

Deutsche lifted its stance on Cerillion to 'buy' from 'hold' but cut the price target to 1,400p from 1,575p.

At 1038 BST, Softcat shares were down 2.2% at 2,036p, while Bytes was 3% higher at 426p. Cerillion shares were 0.8% lower at 960p.