Berenberg Lowers ALSO's Rating Amid Market Challenges

Overview of the Downgrade#

Berenberg has changed its rating for ALSO Holding AG from "Buy" to "Hold" and reduced its price target significantly from CHF320 to CHF165. This decision comes as the firm identifies substantial risks to the company’s mid-term guidance amid a tough market environment.

Recent Financial Performance#

The downgrade follows the release of ALSO's fiscal 2025 results on February 17, where the company reported an EBITDA (Earnings Before Interest, Taxes, Depreciation, and Amortization) of EUR286 million. This figure is at the lower end of their guidance and 23% below what analysts had expected. The announcement led to a sharp decline in the company’s shares, which fell over 30% on the same day.

Market Pressures and Growth Challenges#

Berenberg highlighted that ALSO is currently facing challenges such as a shortage of components and longer replacement cycles in its hardware and software distribution business, which accounts for 72% of its sales. Additionally, the International Data Corporation predicts a decline in PC shipments by 11.3% in 2026, which is concerning as this segment has historically been the slowest-growing and lowest-margin for ALSO.

Future Projections#

Berenberg noted that the commercialization of AI products is progressing slowly, with customers taking their time to move from testing to actual deployment. The firm pointed out that ALSO has experienced negative growth since 2021, with any recent improvements largely attributed to its acquisition of Westcoast. Looking ahead, Berenberg forecasts a modest sales growth rate of 1.8% for ALSO from 2026 to 2028.

ALSO anticipates an EBITDA range of EUR425 million to EUR525 million in the mid-term, while Berenberg estimates it will only reach EUR384 million by 2029. Achieving the company’s guidance would require an ambitious EBITDA growth rate of 14% from 2025 to 2029, compared to an average of just 8% over the past decade. Berenberg expressed skepticism about this target, especially given that ALSO's historical EBITDA margin has peaked at 2.5% and fell to 2.1% in 2025.