Berenberg lowers target price on Cerillion

(Sharecast News) - Analysts at Berenberg lowered their targret price on software firm Cerillion from 2,125p to 2,000p on Wednesday as it said the group was now "accelerating into the AI era". Berenberg, which has a 'buy' rating on the stock. noted that Cerillion's share price was up by 27% year-to-date, compared to the broader UK software sector's 26% droup.

Following a £42.5m contract win in January, compared to its entire FY25 revenue base of £45m, Berenberg expects Cerillion to deliver "significant revenue growth acceleration" in FY26.

In its view, Cerillion was now well placed to continue its market share gains, due to its differentiated product offering and strong execution.

"Alongside Cerillion's incumbent advantages and proactive approach to AI, we think its mission-critical solution, which offers broad-based functionality and serves a regulated industry, leaves the company well positioned in the AI era," said the German bank.

"Management's stated intention is to double revenues organically in the next three to five years. Our base case forecast is for FY26 revenue growth of 20%, compared to 4% in FY25, and for a 15% FY25-28 revenue CAGR, leaving Cerillion on track to double its revenues organically by FY30."

Berenberg also noted that given the "recent and largely indiscriminate sell-off" in software-as-a-service companies, it derives its 2,000p price target entirely from a discounted cash flow analysis.

Reporting by Iain Gilbert at Sharecast.com