FRANKFURT (dpa-AFX) - IT service provider Nagarro's decision not to go ahead with a takeover and subsequent exit from the stock market was well received on Thursday. The share price was also driven by plans for a sustainable dividend, share buybacks and a buy recommendation.

Around midday, Nagarro was one of the best performers in the second-line index SDax, gaining 3.1 percent to 82.50 euros. The shares thus left the 200-day line, which is considered a longer-term trend indicator and currently stands at 81.25 euros, behind them. However, they are still a long way off their highest price since April 2023, which they reached in November at almost 103 euros.

The end of the talks about a possible privatization was no real surprise, wrote the experts at investment bank Oddo BHF. They had already pointed out when the plans were announced that the IT service provider did not really fit the private equity profile of a potential buyer.

The solid targets for 2025 should reassure investors and the valuation offers plenty of scope, they added. The experts changed their previous "Neutral" rating to "Outperform" with a target price of EUR 107.

Instead of a privatization, Nagarro now intends to buy back shares in the coming years and pay sustainable dividends. So far, the market has apparently hardly expected any dividends to be paid.

From an operational perspective, the analysts at Warburg Research had already noted the previous day that companies' IT spending budgets are likely to have bottomed out. Rising expenditure over the course of the year should therefore ensure growth. Following the election decision in the USA, companies are now likely to increasingly implement IT projects that have been postponed./ajx/bek/mis