Other analysts raising their targets include:
* Laurentian Bank Securities’ Nick Agostino to US$61 from US$52 with a “hold” rating.
“Despite operating in an uncertain environment, DSG highlighted several growth opportunities which should offer notable tailwinds, we believe, starting 2021, including: 1) e-commerce where the U.S. market grew 22 per cent year-over-year, and now represents 10 per cent of DSG’s sales. We believe this is a sticky business and is an area of ongoing investment for DSG including from the recent ShipTrack acquisition; 2) U.S. policy changes which should drive new trading agreements and in our view create a less volatile trading environment; 3) vaccine distribution offering a lucrative opportunity for DSG’s customers for what is a very sensitive product (specifically regarding storage temperature), and; 4) Brexit which should result in new trading agreements for the U.K. and offer step-function growth for DSG (reflected in our multiple increase),” he said.
* Scotia Capital’s Paul Steep to US$61 from US$58 with a “sector outperform” rating.
“Our view is that Descartes Q3 results demonstrated on-going momentum inline with our estimates (beat to consensus) delivering 0.7-per-cent organic growth (in constant currency) sequentially improving from Q2, in part due to higher GLN transactions revenues and aided by trends in e-commerce,” he said.