First Berlin – Intershop Communications AG Research Update (03/08/2018)

First Berlin Equity Research has published a research update on Intershop Communications AG (ISIN: DE000A0EPUH1). Analyst Karsten von Blumenthal reiterated his REDUCE rating and decreased the price target from EUR 1.64 to EUR 1.58.

Abstract
H1 figures were below the previous year's numbers and our forecasts. A sharp decline in license revenues caused Intershop to reduce 2018 guidance. The company now expects 2018 sales to be slightly below last year's level of €35.8m (previously: slightly above) and negative EBIT in the low single-digit euro million range (previously: slightly positive EBIT). We have lowered our forecasts for this and the next year, but leave the 2020 forecast unchanged as the global roll-out of Intershop's e-commerce solution Commerce-as-a-Service (CaaS) on Microsoft's Azure cloud looks set to drive revenues in 2020E, and management maintains its 2020 target of €50m revenues and 5% EBIT margin. An updated DCF model accounting for the lowered forecasts yields a new price target of €1.58 (previously: €1.64). We reiterate our Reduce rating.