UBS starts Cancom at 'buy,' sees boost from Germany's digital push

By Reuters News

** UBS initiates Cancom COKG.DE at "buy," seeing the German IT services provider as well positioned to benefit from accelerating public-sector digitalisation spending and a recovery in small and medium-sized business demand

** Germany's federal budget calls for a 50% increase in digitalisation spending next year, while the €5 billion Digitalpakt 2.0 programme has recently entered into force, UBS notes

** The broker expects Cancom's exposure to smaller businesses and local public-sector customers to become a tailwind into 2027 after weighing on performance relative to peers in recent years

** "The market is likely concerned about demand destruction from higher memory prices," UBS says, but expects demand for servers, networking equipment and software growth to offset the impact

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