WiseTech Global Ltd (ASX: WTC) shares have been rebounding this week.
But if you thought the gains were over, think again.
That's because the team at Bell Potter believes the logistics software provider's shares could rise strongly from current levels.
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What is the broker saying?
Bell Potter was pleased with WiseTech Global's performance during the first half, noting that its revenue and earnings were a touch ahead of expectations. It said:
1HFY26 revenue of US$672m was 4% ahead of our forecast and 3% above VA consensus. Statutory EBITDA of US$252m was 1% above our forecast and 3% ahead of VA consensus. NPAT of US$68.2m was not comparable with our forecast as we had not included acquired amortisation of US$41.0m. Interim dividend of US6.8c ff was modestly ahead of our forecast of US6.7c ff.
It also highlights that its guidance for FY 2026 has been reaffirmed, and management has announced a major reduction in its headcount. It adds:
WiseTech reaffirmed its FY26 guidance of revenue b/w US$1.39-1.44bn, EBITDA b/w US$550-585m and EBITDA margin b/w 40-41%. The company also announced up to a 50% headcount reduction in product & development and customer service. On the call CEO Zubin Appoo said the company did not expect any material net impact from the reduction in FY26.
Big potential returns
According to the note, the broker has retained its buy rating on WiseTech shares with a trimmed price target of $83.75 (from $87.50).
Based on its current share price of $48.70, this implies potential upside of 72% for investors over the next 12 months.
Commenting on its buy recommendation, the broker said:
There are no changes in our key assumptions and we continue to apply multiples of 55x and 30% in our PE ratio and EV/EBITDA valuations and an 8.6% WACC in the DCF. We do, however, now apply underlying rather than reported EPS in our PE valuation. The net result is a 4% decrease in our target price to $83.75 which has been driven by the modest downgrades. This TP is >15% premium to the share price so we maintain our BUY recommendation.
The key potential catalyst is the release of the FY26 result in August where, firstly, we expect the guidance to be met and, secondly, expect FY27 guidance to be provided. The latter has the potential to positively surprise given it will provide some visibility around the expected cost savings from the headcount reduction and likely show the company is well on track to return to an EBITDA margin of 50% or more in the next two to three years.
