2025-06-10-Jefferies-达索系统（DSY）_等待另一次目标重置_12页_517kb

Summary of Dassault Systemes Analysis

Core Content

Dassault Systemes (DSY FP) recently held a CMD (Chief Management Discussion) to reset its mid-term targets, shifting the original FY23-28 revenue growth from 10% CAGR to an upgraded 10.5% CAGR for FY25-29. Despite this adjustment, the company is currently trending behind the required run-rate, with FY25 guidance below expectations. The analysts maintain their "Underperform" rating, highlighting concerns over the sustainability of growth and valuation.

Main Points

• Target Reset: Dassault has moved its FY28 target to FY29, implying a reduced CAGR from 15% to 13% for FY24-29. The implied FY25-29 CAGR remains at 15%, but revenue growth is expected to be back-end loaded.

• Product Launch: The company launched 3DUverses, which is viewed as more of an evolution and rebranding of existing capabilities rather than a significant innovation. While the technology remains strong, the focus on commercialisation and business model challenges is a concern.

• Subscription Transition: Dassault is transitioning to a subscription model, with a gradual shift in revenue mix. However, the analysts believe this transition may not be fully aligned with the company's growth potential due to potential cross-selling opportunities being missed.

• Valuation Concerns: The company's valuation remains stretched, with a high FCF yield compared to peers. Adjusting for share-based compensation, DSY trades at one of the highest valuations in the sector, which the analysts view as a risk-reward imbalance.

• Growth Expectations: The analysts expect the company to achieve a 7-8% foundation growth for FY24-29, with an additional €1bn from 3DUniverses. However, they note that the revised targets may not be achievable without significant M&A activity, which could negatively impact valuation.

Key Financial Metrics

Investment Thesis

• Dassault Systemes is a leading provider of engineering and design software.
• The migration to cloud-based solutions under the 3DEXPERIENCE brand brings benefits such as higher maintenance pricing and deeper integration.
• Entry into the life sciences market is seen as more risky than anticipated due to higher competition and different market dynamics.

Valuation and Risks

• Valuation: Based on FCF yield ex-SBP, the price target is set at €28, a -13% discount from current price.
• Risks: The company faces risks related to faster-than-expected cloud revenue growth, better-than-expected revenue growth, and faster-than-expected product innovation delivery.

Scenarios

• Base Case (€28, -13%): Assumes sustained HSD growth for the next 3 years, with the company achieving its revised targets through M&A.
• Upside Scenario (€44, +36%): Assumes improved cloud growth from Medidata Solutions, leading to higher-than-expected FCF and EPS.
• Downside Scenario (€23, -29%): Assumes rapid deceleration in growth, with potential customer churn and reduced FCF, leading to a re-rating below peers.

Sustainability

• Dassault is focused on sustainability, aiming to link two-thirds of new licenses to sustainability goals by 2025.
• The company is also working to increase the percentage of financial metrics eligible for EU taxonomy.

Questions to Management

1. How is Dassault differentiating its sustainability offerings from competitors?
2. How is sustainability integrated into R&D and capital allocation processes?

Catalysts

• Publicly announced M&A of cloud businesses.
• Major wins from competitors that indicate market share loss.

Analysts

• Charles Brennan – Equity Analyst
• Shimoni Agarwal – Equity Associate
• Hannes Leitner – Equity Analyst
• Marco Maglioli – Equity Analyst

Rating and Price Target

• Rating: Underperform
• Price: €32.33
• Price Target: €28 (-13%)
• Market Cap: €43.0B / $49.1B

Summary of Targets

Revenue Mix

Analyst Certification

All analysts certify that their views reflect personal opinions and are not influenced by compensation tied to recommendations.

Valuation Methodology

Jefferies uses market capitalization, maturity, growth/value, volatility, and expected total return to assign ratings. Price targets are based on FCF yield and peer comparisons.

Investment Recommendation

• Underperform: Expected total return of minus 10% or less within 12 months.

Company Description

Dassault Systèmes SA provides software solutions and consulting services across design, engineering, and digital transformation. Founded in 1981, it is headquartered in Vélizy-Villacoublay, France.

Company Specific Disclosures

Alex Nguyen has an equity position in Intuit Inc. (NASDAQ: INTU).