ii view: Computacenter shares rally after issuing fresh upgrade

Trading update for third quarter to 30 September

• Product order backlog of £12.6 billion, up from £9.3 billion in late June
• Now expects full-year adjusted pre-tax profit of no less than £425 million, up from a previous estimate of no less than £380 million

ii round-up:

Tech hardware supplier and IT consultant Computacenter (LSE:CCC) once again raised profit forecasts, fuelled by continuing strong demand from customers in both North America and the UK.

Booming demand for AI services hosted by hyperscalers (massive companies operating global infrastructure) and neocloud (AI-first cloud providers) swelled the order backlog to £12.6 billion as of late September from £9.3 billion in late June. Computacenter now expects annual adjusted pre-tax profits of no less than £425 million, up from a previous estimate of £380 million and ahead of City forecasts of up to £395 million.

Shares in the FTSE 100 company rose 11% having come into this latest news up by just over two-thirds so far in 2026. FTSE 250 and software focused Kainos Group (LSE:KNOS) is up by around two-fifths during that time. The FTSE 100 and 250 indices are each up around 8% year-to-date.

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As well as being one of the world's six largest resellers of tech equipment, Computacenter also advises organisations on IT strategy, implements the appropriate technology and manages customer’s infrastructures for them.

Equipment sourcing sales rose strongly during the quarter, with growth in consultancy demand more than countering a decline in managed service sales.

Geographically, strength in North America and the UK continued to sit alongside stable demand in Germany.

A capital markets day on 24 November is followed by a full-year trading update on 28 January.  

ii view:

Started in 1981, Computacenter today employs over 21,000 people worldwide. Technology sourcing accounted for most revenue over the company’s last financial year at just over fourth-fifths, with service revenues the balance. It's worked for more than 200 major customers that either have or include Microsoft Corp (NASDAQ:MSFT), International Business Machines Corp (NYSE:IBM), Dell Technologies Inc Ordinary Shares - Class C (NYSE:DELL), Cisco Systems Inc (NASDAQ:CSCO), and Transport for London.

For investors, some pulling forward of future demand may be the case given shortages of hardware components such as microchips. A forecast price/earnings (PE) ratio above the 10-year average may suggest the shares are not obviously cheap. Work to improve efficiency at the German business is still required, while corporate investment in technology is cyclical and subject to ups and downs.

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To the upside, AI requirements, IT efficiency, digitalisation and cyber security all remain key focuses for companies and governments globally. Adjusted net funds of £309 million as of late June point to a robust balance sheet. Customer sector and geographical diversification exist, while shareholder returns of over £1.3 billion since joining the stock market now see the shares on a forecast dividend yield of around 2.3%.

On balance, and while risks remain, especially around AI sector spending, current industry dynamics a consensus analyst fair value estimate above £62 per share gives grounds for investor optimism.

Positives:

• Product and customer sector diversity
• Exposure to potential AI requirements

Negatives:

• IT sales are often volatile
• Currency moves can impact

The average rating of stock market analysts:

Buy