Shares in Softcat PLC (LON:SCT) were upgraded to ‘neutral’ from ‘sell’ by Citigroup as analysts said the premium valuation is here to stay.

The investment bank assumed its ‘sell’ thesis on the IT group’s inability to maintain its valuation premium against peers through the pandemic.

However, strong trading conditions in the last twelve months, driven in part by the shift to remote working, mean the premium will persist, analysts wrote.

In January, the FTSE 250 group said trading continued to be positive with ongoing strong demand from the public sector.

Meanwhile, the corporate segment continued to improve but remained “somewhat mixed” with some of its customers pursuing large projects while others were being more cautious.

The second half of the year was forecast to be significantly ahead of expectations.

Shares rose 1% to 1,592p on Monday morning, up 14% year to date.

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