RBC Capital starts Marlowe at ‘outperform’
Marlowe
307.00p
16:55 20/12/24
-1.92%
-6.00p
RBC Capital Markets initiated coverage of Marlowe on Wednesday with an ‘outperform’ rating and 630p price target.
FTSE AIM 100
3,439.31
17:04 20/12/24
n/a
n/a
FTSE AIM All-Share
710.60
17:04 20/12/24
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Support Services
10,602.77
17:14 20/12/24
0.33%
34.59
It noted that following the sale of its software & services assets on 22 February for £430m, Marlowe’s stock rebounded by around 18%, reflecting "a slight reversal of investor sentiment".
However, the shares are still trading at a significant discount to peers.
"We believe the remaining underlying business is solid with annual organic growth of 5% and margins of 12-14% and efficiencies should drive further margin improvement by 1-2% by F2027E," RBC said.
"With the new CEO search underway, the short-term business strategy is intact. We expect the acquisition strategy will return longer term, but at a more moderate pace."