BUY ATO FP, Our top pick in the IT services sector, we see a +35% upside

*The results posted a couple of weeks ago were widely inline and guidance was reiterated

*With Digital, Cloud, Security and Decarbonization having increased to more than half of the group’s total revenue we see the company well placed for further growth – over time the company looks to further increase this to around 65% of the total revenue

*CEO change could also help bring more excitement and potential catalysts for the stock

*The course of the company has meant they now will rely less on large deals and more on smaller growth-related deals within the high demand assets

*The company said on the conf call last month that they have some medium-sized deals in the pipeline along with some bolt-ons

*DBK pointed to the largest concern being the classical assets that are burdening top-line growth

*The company has recently been in focus after Dealreporter and Betaville flagged Atos as a potential takeover targets for PE firms and potentially also a strategic buyer

*Our DCF valuation comes in at around EUR 60  – the company also trades at a significant discount to its peers, analysts have in the past put this down to the mix of businesses and the volatility of the stock

*We see the increased focus on Digital, Cloud, Security and Decarbonization as a great catalyst to narrow the discount

*The stock currently has 6 Buys, 11 Holds and 1  Sell with an average pt of EUR 50 – with notably Kepler and SocGen with pt of EUR 60