Berenberg downgrades Blue Prism to 'hold'

Analysts at Berenberg downgraded software outfit Blue Prism from 'buy' to 'hold' on Monday following the group's 2020 full-year results last week.

Berenberg said Blue Prism's results announcement on 14 January, which included a reduction in revenue guidance, caused the shares to fall by 25% on the day but noted that it feels the circumstances were not as simple as the firm rebasing revenue expectations in the context of ongoing macro uncertainty.

The German bank said Blue Prism's new guidance pointed towards decelerating revenue growth, but with a clearer path towards cash flow breakeven and eventually profitability.

A portion of this can be explained by Covid-19, acknowledged Berenberg, but for the analysts, it also raises questions about the robotic process automation market as a whole, pricing, competition and Blue Prism's commercial strategy.

"Despite its relatively attractive valuation, we downgrade Blue Prism to 'hold' and reduce our price target to 1,375.0p," said Berenberg.