Berenberg lowers target price on Qinetiq
By Iain Gilbert
Date: Friday 03 Dec 2021
(Sharecast News) - Analysts at Berenberg lowered their target price on defence technology company QinetiQ from 415.0p to 330.0p on Friday, but reiterated their 'buy' rating on the firm's shares despite branding it the "worst-performing defence stock" in its coverage so far this year.
Berenberg said Qinetiq had "significantly underperformed" since its first-half trading update after it disclosed two separate issues - a £15.0m write-down on a complex project and operational disruption in the US.
The German bank highlighted that Qinetiq's shares were now hovering around their 52-week low and had sharply de-rated since October to trade 25% below their two-year average enterprise value/underlying earnings multiple.
However, Berenberg also thinks the £400.0m fall in the company's market cap compared to a £27.0m cumulative loss in operating profit was "an overreaction to temporary problems".
"We view the current price as an attractive entry point into a highly resilient business model offering sustainable organic growth with upside from M&A," said Berenberg
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