Canaccord starts coverage of Science Group at 'buy'
By Michele Maatouk
Date: Monday 13 Jan 2025
(Sharecast News) - Canaccord Genuity started coverage of Science Group on Monday with a 'buy' rating and 758p price target as it pointed to 14 years of strong shareholder returns.
Canaccord said Science Group has an impressive and consistent track record of delivering a combination of organic and disciplined inorganic growth with minimal shareholder dilution.
"This track record, alongside management's fixation on cash generation from operations, has delivered a 12% EPS CAGR since FY10 and attractive shareholder returns, with the share price increasing more than 10x since a 40p placing in 2010 and adjusted operating profit converting into real cash flow," it said.
"We view the new debt facilities as providing existing investors with yet another opportunity for further upside and an opportunity for new investors to ride the next wave.
"Our sum-of-the-parts valuation of Science Group's operating businesses implies material upside to the current market cap.
"We contrast Science Group's 8.3x FY24E EV/EBIT multiple (CGe) with the recent PE-backed acquisitions of Alpha Financial (14.5x) and RPS Group (26.7x) in Consultancy."
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