Wisetech Global Limited (WTC) – Going forward

WiseTech Global Limited engages in the development and provision of software solutions to the logistics execution industry in the Americas, the Asia Pacific, Europe, the Middle East, and Africa. It develops, sells, and implements software solutions that enable and empower logistics service providers to facilitate the movement and storage of goods and information. WiseTech Global was incorporated in 1994 and is based in Alexandria, Australia.

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WiseTech Global (WTC) downgraded its FY25 revenue and earnings guidance, citing delays in launching a new product following "distractions flowing from the recent media attention and the organisational changes" after various allegations about the conduct of founder and now-former CEO Richard White.

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The logistics software group, which accounts for 40% of the IT sector in the benchmark S&P/ASX 200 Index, now expects an increase in operating earnings (EBITDA) of 21–33%, down from prior guidance for 33–41%.

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Post the trading update, we have cut our EPS forecast by 6% for FY25 to account for earnings impact of the delayed launch of the Container Transport Optimisation product. Our FY26 estimate is unchanged and our FY27 forecast rises 4%.

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Our price target rises to $137.00 from $120.00, highlighting our positive view on WiseTech’s products and their strong presence in the logistics industry, with the company noting in its FY24 results presentations that it had rolled out its core CargoWise product to 52 large global freight operators, including more than half of the world’s top 25 freight forwarders, the latest being Nippon Express, Japan’s largest freight forwarder.

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Given how we see the company’s prospects, and the potential upside on offer post Friday’s sharp sell-down, we also raise our recommendation on WiseTech to Accumulate from Hold.