DASSAULT SYSTEMES

Trading Short into Fridays CMD

 

• Analysts day Friday where they will give their projections for the next four years
• They have reassured the mkt recently on their ability to improve licence growth and have set some high standards leading into this CMD. They are expected to announce a doubling of the revenue between 2013 and 2018 and more than a doubling of the EPS through margin expansion
• Been question marks over their margins since their last warning in October 2013. Organic growth may be good but I think margins will be an issue. The operating margins target was lowered in April and see this trend continuing
• Trading on rich multiples with analysts 40% buys 36% holds and 24% sell recommendations
• Closed the gap from their last warning in October and have no margin for error Friday
• Market obviously thinks they will come up with the goods Friday and ODDO and ML giving you a nice entry point today
• LT they are a great way to have European exposure to 3D but would use this strength to get short into Fridays CMD as margin erosion continues