Barclays upgrades IWG, says shares 'ripe for a re-rating'

It said that IWG - the largest operator of flex offices globally - is benefiting from a structural shift to hybrid working post the pandemic.

"However, the shares have been stagnant since the pandemic lockdowns were lifted and despite revenue, EBITDA and, most importantly, free cash flow exceeding pre-pandemic levels, the shares remain materially below pre-pandemic prices," it said.

"With investor confidence in management's ability to deliver having previously been shaken, we believe the market is still not giving IWG credit for its much-improved FCF generation, the capital-light expansion into Managed operations and management's recent tendency to under-promise and over-deliver."

Barclays said that in its view, after this period of caution/stagnation, the shares are ripe for a re-rating as we enter an inflection point, starting with the FY24 results on 4 March.

At 1035 GMT, the shares were up 3.7% at 182.80p.