WiseTech's three-year rally prompts dialogue about renewed involvement

October 25, 2024 03:27 PM AEDT | By Team Kalkine Media

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WiseTech's three-year rally prompts dialogue about renewed involvement — Image source: Shutterstock

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Highlights

Surge in WiseTech Shares: WiseTech shares rose 22% following the resignation of CEO Richard White amid workplace misconduct allegations, with CFO Andrew Cartledge stepping in as Interim CEO.

Analysts Maintain Bullish Outlook: Major investment banks, including Morgan Stanley, RBC Capital, and Goldman Sachs, reaffirmed their positive perspectives on WiseTech, viewing recent market volatility as a potential opportunity for growth.

Growth Projections: Analysts project substantial growth for WiseTech, anticipating a 37% increase in EBITDA for FY25, supported by strong adoption of its CargoWise platform.

WiseTech (ASX:WTC) shares experienced a significant increase of 22% at the market open on Friday, following the unexpected resignation of founder and CEO Richard White. This marked the company’s most substantial daily gain since August 2021. Mr. White's departure was prompted by ongoing allegations of workplace misconduct, including sexual harassment and bullying, which have been extensively covered in the media.

CFO Andrew Cartledge has stepped into the role of Interim CEO, while Deputy CFO Caroline Pham will assume the role of Interim CFO. A search for a permanent CEO is underway, although Mr. Cartledge had previously announced plans to retire at the end of 2025. Interestingly, Mr. White will retain a consulting role as "Founder and Founding CEO," maintaining a connection to the company.

Despite the leadership changes introducing short-term uncertainty, analysts largely view this transition as manageable, emphasizing WiseTech's robust fundamentals. Major investment banks have expressed confidence in the company's long-term prospects, with Morgan Stanley maintaining an OVERWEIGHT rating while adjusting its price forecast. RBC Capital upgraded the stock to OUTPERFORM, citing the leadership shift as a governance improvement. Goldman Sachs raised its rating to BUY, highlighting the potential for growth amid favorable market conditions.

Analysts believe that WiseTech's CargoWise platform is poised for widespread adoption among freight forwarders, creating substantial opportunities for customer acquisition and revenue growth. The company’s valuation is deemed reasonable, trading at a slight discount to its historical averages, despite expectations of accelerated earnings growth. Upcoming events such as the Annual General Meeting and Investor Day are anticipated to act as key catalysts for the company’s future performance.

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