* Lowers earnings estimates for global software, IT
* Expects IT cos' earnings to fall 2 pct in 2012, increase 4
pct in 2013
* Favours large caps vendors and companies that are
July 20 Earnings at global software and IT
services companies are expected to decline by 2 percent on an
average this year, Societe Generale said, downgrading several
stocks, including Logica Plc and Sage Group Plc.
"We expect companies to adopt a more cautious view of their
prospects in the upcoming reporting season, and consensus
estimates are likely to come down," the brokerage said.
SocGen had earlier projected flat earnings for the sector
For 2013, SocGen expects earnings to grow only 4 percent,
compared to its prior view of a 12 percent growth.
The brokerage cut its rating on British companies Logica and
Sage Group to "sell" from "hold." It downgraded Canada's top IT
services company CGI Group Inc and French company
Aubay SA to "hold" from "buy."
SocGen also cut its price targets on several stocks,
including SAP AG, Software AG, Oracle Corp
, IBM Corp and Infosys Ltd.
The brokerage said it favours vendors with a strong product
pipeline and greater exposure to the United States and emerging
markets. It also prefers large-cap vendors as they are more
SocGen named Atos SA, SAP AG, Altran
Technologies SA and CapGemini SA among its
top picks. It upgraded Alten SA to "buy" from "hold,"
partly on valuation.
The STOXX 600 Technology Index has risen 8.2 percent
since the start of June.
Company name RIC Price Target Close Price
New Old (July 19)
Accenture $58 $64 $58.3
Alten eur29 eur 25 eur21.6
Altran Tech eur5.2 eur5.6 eur3.44
Atos eur59 eur60 eur46.7
Aubay eur5.4 eur6.3 eur4.85
Axway Software eur20 eur23 eur13.9
CapGemini eur34 eur40 eur26.2
CGI Group C$24 C$26 C$23.7
Dassault Systemes eur77 eur80 eur73.4
IBM $188 $205 $183.7
Infosys $38 $45 $39.2
Indra eur8.5 eur10.5 eur6.43
Logica 71p 79p 104.6p
Oracle $30 $30.5 $22.9
Sage Group 260p 270p 276p
SAP eur56 eur60 eur49.1
Software AG eur32 eur34 eur23.1
Sopra Group eur49 eur57 eur34.8
Steria eur17 eur21 eur11.6