Serco Group (SRP)

Sector:

Support

Index:

FTSE 250

157.00p
   
  • Change Today:
      1.00p
  • 52 Week High: 193.10p
  • 52 Week Low: 154.40p
  • Currency: UK Pounds
  • Shares Issued: 1,024.81m
  • Volume: 63,553
  • Market Cap: £1,608.95m
  • RiskGrade: 174
  • Beta: 1.04

RBC Capital lifts Serco price target after update

By Michele Maatouk

Date: Friday 15 Dec 2023

LONDON (ShareCast) - (Sharecast News) - RBC Capital Markets lifted its price target on Serco on Friday to 200p from 190p after the company's pre-close trading update and acquisition announcement a day earlier.
The bank said it was updating its forecasts for the trading update and guidance. RBC's 2023 operation forecasts are largely unchanged, while the 2024 earnings per share estimate moves up around 10% and 2025 by 6%, to reflect the higher profit guidance, the EHC acquisition and a slightly lower tax rate.

The target price has nudged up as a result.

RBC noted that Serco's cash generation has been "excellent" over the last few years, which means it now has a very strong balance sheet.

"We expect it to continue to pursue bolt-on M&A but see no reason why it can't also announce a sizeable buyback at the FY numbers," RBC said. "This isn't factored into forecasts, but a circa £100m buyback, we estimate, would be 3-4% accretive."

The bank also said that despite strong execution and excellent free cash flow generation, Serco's multiple remains low, which "seems harsh to us", especially relative to the sector.

"Going forward we think more consistent mid-single digit organic growth is likely, with some margin upside from contract improvement initiatives and overhead management. Add in the balance sheet options, and we see the potential for more consistent double-digit EPS and FCF growth over the medium-term. This should allow for material re-rating potential over time."

RBC maintained its 'outperform' rating on the shares.

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Note 1: Prices and trades are provided by Digital Look Corporate Solutions and are delayed by at least 15 minutes.

Note 2: RiskGrade figures are provided by RiskMetrics.

 

Serco Market Data

Currency UK Pounds
Share Price 157.00p
Change Today 1.00p
% Change 0.64 %
52 Week High 193.10p
52 Week Low 154.40p
Volume 63,553
Shares Issued 1,024.81m
Market Cap £1,608.95m
Beta 1.04
RiskGrade 174

Serco Star Ratings

Compare performance with the sector and the market.
more star ratings
Key: vs Market vs Sector
Value
58.03% below the market average58.03% below the market average58.03% below the market average58.03% below the market average58.03% below the market average
23.6% below the sector average23.6% below the sector average23.6% below the sector average23.6% below the sector average23.6% below the sector average
Price Trend
14.1% below the market average14.1% below the market average14.1% below the market average14.1% below the market average14.1% below the market average
20% below the sector average20% below the sector average20% below the sector average20% below the sector average20% below the sector average
Income
12.04% below the market average12.04% below the market average12.04% below the market average12.04% below the market average12.04% below the market average
8.47% above the sector average8.47% above the sector average8.47% above the sector average8.47% above the sector average8.47% above the sector average
Growth
3.34% above the market average3.34% above the market average3.34% above the market average3.34% above the market average3.34% above the market average
3.23% above the sector average3.23% above the sector average3.23% above the sector average3.23% above the sector average3.23% above the sector average

What The Brokers Say

Strong Buy 6
Buy 3
Neutral 2
Sell 0
Strong Sell 0
Total 11
buy
Broker recommendations should not be taken as investment advice, and are provided by the authorised brokers listed on this page.

Serco Dividends

  Latest Previous
  Interim Final
Ex-Div 29-Aug-24 18-Apr-24
Paid 04-Oct-24 10-May-24
Amount 1.34p 2.27p

Trades for 22-Nov-2024

Time Volume / Share Price
08:19 952 @ 157.00p
08:19 1,187 @ 157.00p
08:17 2,528 @ 157.00p
08:16 2,258 @ 157.00p
08:16 3 @ 157.00p

Serco Key Personnel

CEO Mark Irwin

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