TeamViewer’s exit from its Manchester United Plc (NYSE:MANU) shirt sponsorship deal should “dramatically step up margin over the coming years,” according to Barclays.
The remote access and remote-control computer software firm noted today that it expects an adjusted earnings (EBITDA) margin of roughly 40% in 2023, following on from the 40.6% in the fiscal year 2022.
“This implies broadly a declining to flattish margin development and reflects an increased level of R&D investment that the company flagged at the trading update in January,” said the broker.
“The company notes that beyond 2023 it sees upside to margin, although driven by a potential early exit of the Manchester United sponsorship.”
Additionally, the broker added that a greater than 6% market cap buyback should be taken well, with the stock having rallied very strongly 12 months ago on a 10% buyback.
Barclays set a target price of €14 for the Deutsche bourse the company, with an overweight ranking on the stock.