PSI SE's Strategic Shift to Cloud Drives Growth

First Berlin Equity Research has updated its outlook on PSI SE, upgrading its stock rating to "Buy" with a revised target price of €36. This change reflects the first year of a three-year plan to transition PSI's product portfolio to a cloud/Software as a Service (SaaS) model. Analyst Simon Scholes anticipates this shift will boost sales growth and profit margins by simplifying scalability both in Germany and internationally.

PSI SE, which has seen a compound annual growth rate (CAGR) of 6.9% between 2018 and 2023, is expected to reach a 2023-28 sales CAGR of 8.7% with a projected EBIT margin of 12.5% by 2028. Key recent partnerships, including those with E.ON and Google, are seen as pivotal in validating and propelling this transformation. These collaborations will facilitate the deployment of new SaaS-based systems later this year and in coming years.