Quirin Privatbank Recommends Buy for Reply SpA Amid Strong AI Demand

Quirin Privatbank has issued a "Buy" recommendation for Reply SpA, maintaining a target price of EUR 170. This decision follows Reply's H1 2026 financial results, which showed a 7.4% year-on-year revenue increase to EUR 1,311.9 million. This growth surpassed expectations by 2.4%, driven largely by the transition of AI projects into production. The company saw significant advancements in data, cloud, and cybersecurity sectors. Additionally, consolidation projects under "Silicon Shoring" contributed positively.

Geographically, Germany showed recovery, Region 2 saw improvements due to business development efforts, and Region 3 benefited from UK's government and defense demand. Conversely, France and the US markets underperformed. The EBITDA margin slightly decreased from 18.3% to 17.8% due to increased service costs and regional investments.

Despite no guidance for 2026, management anticipates sustainable growth, with current AI demand supporting their investment strategy. However, they acknowledge risks from selective spending and regional disparities.