Citi cuts Qinetiq price target, maintains 'buy'
By Michele Maatouk
Date: Wednesday 26 Mar 2025
(Sharecast News) - Citi cut its price target on Qinetiq on Wednesday to 510p from 530p as it said near-term uncertainty was an overhang but long-term value remains.
Citi said it was updating its forecasts following the recent profit warning. It now sees Qinetiq achieving closer to £2.1bn of revenue in FY27, versus around £2.4bn previously, with its mid-term EBIT forecast moving approximately 15% lower.
"The fair value impact is somewhat offset by the value accretion of the £200m share buyback over next two years," Citi said.
The bank said it still believes the stock is undervalued given the healthy cash generation, relatively unlevered balance sheet, and growing European defence spend.
"However, near-term, the uncertainty around the US business and headwinds ahead of UK Strategic Defence Review are likely to be an overhang until clarity emerges around the political decision making in both countries."
Citi maintained its 'buy' rating on the stock.
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