Original-Research: GFT Technologies SE (von NuWays AG): BUY

Classification of NuWays AG to GFT Technologies SE

Company Name:	GFT Technologies SE
ISIN:	DE0005800601
Reason for the research:	Update
Recommendation:	BUY
Target price:	EUR 32
Target price on sight of:	12 months
Last rating change:
Analyst:	Simon Keller

Q3 review: upgraded guidance still leaves room; chg.

GFT's Q3 results combine accelerating sales and backlog growth with further margin expansion. This strengthens earnings momentum and visibility. With this, the higher FY26 guidance still looks cautious, implying a sharp Q4 earnings slowdown and leaving room for further upside, in our view.

Backlog growth accelerated further. The September order backlog rose 22% yoy to € 397m, following 18% yoy growth at June-end and 11% at March-end, supporting revenue visibility. Deutsche Bank's selection of GFT for its German Private Bank core banking modernisation once again underlines the group's position in complex banking transformation projects.

Q3 sales increased 11.5% yoy to € 238.3m (eNuW: € 230m). Growth accelerated from 6.1% in Q2, with Brazil, Spain and Colombia being the main drivers. Europe returned to 5% growth following a 3% decline in Q2. The UK resumed yoy growth as anticipated, adding another contributor alongside the established growth markets. Germany's trajectory improved, despite investment caution continuing to weigh on demand.

Q3 adj. EBIT grew 31.7% yoy to € 20.3m (eNuW: € 18.0m), implying a margin improvement of 1.3pp yoy to 8.5% (eNuW: 7.8%). Purchased services grew only c. 1% yoy, reducing their share of sales by 1.2pp to 11.7%. Better personnel efficiency on an adjusted basis and lower depreciation provided additional margin support.

Higher guidance still looks cautious against Q3 momentum. GFT raised its FY26 sales target to € 945m (old: € 930m) and adj. EBIT to € 72m (old: € 71m). The new targets imply Q4 sales of c. € 244m (+5% yoy vs. +11.5% yoy in Q3) and adj. EBIT of c. € 19.1m (-13% yoy vs. +31.7% yoy in Q3). The implied margin of 7.8% would also mark a sequential decline from Q3's 8.5%. Our Q4 forecast stands at c. € 245m sales and € 21.1m adj. EBIT (-4% yoy; 8.6% margin), placing earnings € 2m above the implied guidance (eNuW). This still allows for a marked earnings slowdown from Q3, leaving room for further outperformance given the stronger UK contribution and improved cost ratios, in our view. GFT also retained its c. 9.5% adj. EBIT margin ambition for 2029, replacing the absolute sales target with a qualitative growth objective.

Peer results highlight continued IT spending by financial institutions. Accenture's Financial Services revenue grew 6% yoy in local currency in fiscal Q4. Cognizant's corresponding Q3 growth was c. 8% in constant currencies, excluding third-party product sales. EPAM provides another positive read-through: Q3 Financial Services sales increased 13.7% yoy on a reported basis, well above group growth of 2.3%. Capgemini also sees Financial Services among its growth drivers. AI adoption also reinforces modernisation needs: Capgemini's latest survey finds that c. 80% of banking and insurance executives prioritise reducing technical debt. This supports the structural demand outlook for GFT's banking, cloud and data expertise (eNuW).

Action: FY estimates increased following better than expected Q3 results.

BUY, PT € 32, based on DCF.

You can download the research here: gft-technologies-se-2026-11-13-previewreview-en-188cf
For additional information visit our website: https://www.nuways-ag.com/research

Contact for questions:
NuWays AG - Equity Research
Web: www.nuways-ag.com
Email: research@nuways-ag.com
LinkedIn: https://www.linkedin.com/company/nuwaysag
Adresse: Mittelweg 16-17, 20148 Hamburg, Germany
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